Source: https://www.legalcrystal.com/case/106438/pilot-life-ins-co-vs-dedeaux
Timestamp: 2020-01-22 01:53:43
Document Index: 395541308

Matched Legal Cases: ['§ 514', '§ 514', '§ 514', '§ 301', '§ 514', '§ 1011', '§ 514', '§ 514', '§ 514', '§ 514', '§ 514', '§ 1011', '§ 502', '§ 1131', '§ 1133', '§ 502', '§ 502', '§ 502', '§ 409', '§ 301', '§ 301', '§ 301', '§ 514', '§ 1144', '§ 514', '§ 514']

Pilot Life Ins Co Vs Dedeaux - Citation 106438 - Court Judgment | LegalCrystal
Pilot Life Ins. Co. Vs. Dedeaux - Court Judgment
LegalCrystal Citation legalcrystal.com/106438
Decided On Apr-06-1987
Case Number 481 U.S. 41
Appellant Pilot Life Ins. Co.
Respondent Dedeaux
pilot life ins. co. v. dedeaux - 481 u.s. 41 (1987) u.s. supreme court pilot life ins. co. v. dedeaux, 481 u.s. 41 (1987) pilot life insurance co. v. dedeaux no. 85-1043. argued january 21, 1987 decided april 6, 1987 481 u.s. 41 certiorari to the united states court of appeals for the fifth circuit syllabus the "preemption clause" (§ 514(a)) of the employee retirement income security act of 1974 (erisa) provides that erisa supersedes all state laws insofar as they "relate to any employee benefit plan," but erisa's "saving clause" (§ 514(b)(2)(a)) excepts from the preemption clause any state law that "regulates insurance." erisa's "deemer clause" (§ 514(b)(2)(b)) provides that no employee benefit plan shall be.....
U.S. Supreme Court Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987)
Held: ERISA preempts respondent's suit under state common law for alleged improper processing of his claim for benefits under the ERISA-regulated benefit plan. Pp. 481 U. S. 44 -57.
(a) The common law causes of action asserted in respondent's complaint, each based on alleged improper processing of a benefit claim under an employee benefit plan, "relate to" an employee benefit plan, and therefore fall under ERISA's preemption clause. Cf. Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724 , 471 U. S. 739 ; Shaw v. Delta Air Lines, Inc., 463 U. S. 85 , 463 U. S. 96 -100. The preemption clause is not limited to state laws specifically designed to affect employee benefit plans. Pp. 481 U. S. 47 -48.
preemption. A common-sense understanding of the language of the saving clause excepting from preemption a state law that "regulates insurance" does not support the argument that the Mississippi law of bad faith falls under the clause. To "regulate" insurance, a law must not just have an impact on the insurance industry, but must be specifically directed toward that industry. Mississippi Supreme Court decisions establish that its law of bad faith applies to any breach of contract, not merely a breach of an insurance contract. Neither do the factors for interpreting the phrase "business of insurance" under the McCarran-Ferguson Act (which factors are appropriate for consideration here) support the assertion that the Mississippi law of bad faith "regulates insurance" for purposes of ERISA's saving clause. Pp. 481 U. S. 48 -51.
(c) Moreover, interpretation of the saving clause must be informed by the legislative intent concerning ERISA's civil enforcement provisions. The language and structure of those provisions support the conclusion that they were intended to provide exclusive remedies for ERISA-plan participants and beneficiaries asserting improper processing of benefit claims. ERISA's detailed provisions set forth a comprehensive civil enforcement scheme that represents a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans. The policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA-plan participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA. The conclusion that ERISA's civil enforcement provisions were intended to be exclusive is also confirmed by the legislative history of those provisions, particularly the history demonstrating that the preemptive force of ERISA's enforcement provisions was modeled after the powerful preemptive force of § 301 of the Labor Management Relations Act, 1947. Pp. 481 U. S. 51 -56.
sum of $500,000.00." Id. at 23-24. Dedeaux did not assert any of the several causes of action available to him under ERISA, see infra at 481 U. S. 53 .
"[T]he question whether a certain state action is preempted by federal law is one of congressional intent. " The purpose of Congress is the ultimate touchstone.'""
Allis-Chalmers Corp. v. Lueck, 471 U. S. 202 , 471 U. S. 208 (1985), quoting Malone v. White Motor Corp., 435 U. S. 497 , 435 U. S. 504 (1978), quoting Retail Clerks v. Schermerhorn, 375 U. S. 96 , 375 U. S. 103 (1963). We have observed in the past that the express preemption
provisions of ERISA are deliberately expansive, and designed to "establish pension plan regulation as exclusively a federal concern." Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504 , 451 U. S. 523 (1981). As we explained in Shaw v. Delta Air Lines, Inc., 463 U. S. 85 , 463 U. S. 98 (1983):
Id. at 29933. See also Shaw v. Delta Air Lines, Inc., supra, at 463 U. S. 99 -100, n. 20 (describing remarks of Sen. Javits).
In Metropolitan Life, this Court, noting that the preemption and saving clauses "perhaps are not a model of legislative drafting," 471 U.S. at 471 U. S. 739 , interpreted these clauses in relation to a Massachusetts statute that required minimum
The Court concluded, first, that the Massachusetts statute did "relate to . . . employee benefit plan[s]," thus placing the state statute within the broad sweep of the preemption clause, § 514(a). Metropolitan Life, supra, at 471 U. S. 739 . However, the Court held that, because the state statute was one that "regulate[d] insurance," the saving clause prevented the state law from being preempted. In determining whether the Massachusetts statute regulated insurance, the Court was guided by case law interpreting the phrase "business of insurance" in the McCarran-Ferguson Act, 59 Stat. 33, as amended, 15 U.S.C. § 1011 et seq.
Given the "statutory complexity" of ERISA's three preemption provisions, Metropolitan Life, supra, at 471 U. S. 740 , as well as the wide variety of state statutory and decisional law arguably affected by the federal preemption provisions, it is not surprising that we are again called on to interpret these provisions.
There is no dispute that the common law causes of action asserted in Dedeaux's complaint "relate to" an employee benefit plan, and therefore fall under ERISA's express preemption clause, § 514(a). In both Metropolitan Life, supra, and Shaw v. Delta Air Lines, Inc., supra, at 463 U. S. 96 -100, we noted the expansive sweep of the preemption clause. In both cases
Metropolitan Life, supra, at 471 U. S. 739 , quoting Shaw v. Delta Air Lines, supra, at 463 U. S. 97 . In particular, we have emphasized that the preemption clause is not limited to "state laws specifically designed
to affect employee benefit plans." Shaw v. Delta Air Lines, supra, at 463 U. S. 98 . The common law causes of action raised in Dedeaux's complaint, each based on alleged improper processing of a claim for benefits under an employee benefit plan, undoubtedly meet the criteria for preemption under § 514(a).
Unless these common law causes of action fall under an exception to § 514(a), therefore, they are expressly preempted. Although Dedeaux's complaint pleaded several state common law causes of action, before this Court Dedeaux has described only one of the three counts -- called "tortious breach of contract" in the complaint, and "the Mississippi law of bad faith" in respondent's brief -- as protected from the preemptive effect of § 514(a). The Mississippi law of bad faith, Dedeaux argues, is a law "which regulates insurance," and thus is saved from preemption by § 514(b)(2)(A). [ Footnote 1 ]
In Metropolitan Life, we were guided by several considerations in determining whether a state law falls under the saving clause. First, we took what guidance was available from a "common-sense view" of the language of the saving clause itself. 471 U.S. at 471 U. S. 740 . Second, we made use of the case law interpreting the phrase "business of insurance" under the McCarran-Ferguson Act, 15 U.S.C. § 1011 et seq., in interpreting the saving clause. [ Footnote 2 ] Three criteria have been used to determine whether a practice falls under the "business of insurance" for purposes of the McCarran-Ferguson Act:
" [F]irst, whether the practice has the effect of transferring or spreading a policyholder's risk; second, whether"
Union Labor Life Ins. Co. v. Pireno, 458 U. S. 119 , 458 U. S. 129 (1982) (emphasis in original).
"" "[i]n expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy."'""
Kelly v. Robinson, 479 U. S. 36 , 479 U. S. 43 (1986), quoting Offshore Logistics, Inc. v. Tallentire, 477 U. S. 207 , 477 U. S. 221 (1986) (quoting Mastro Plastics Corp. v. NLRB, 350 U. S. 270 , 350 U. S. 285 (1956) (in turn quoting United States v. Heirs of Boisdore, 8 How. 113, 49 U. S. 122 (1849))). Because, in this case,
The civil enforcement scheme of § 502(a) is one of the essential tools for accomplishing the stated purposes of ERISA. [ Footnote 3 ] The civil enforcement scheme is sandwiched between
two other ERISA provisions relevant to enforcement of ERISA and to the processing of a claim for benefits under an employee benefit plan. Section 501, 29 U.S.C. § 1131, authorizes criminal penalties for violations of the reporting and disclosure provisions of ERISA. Section 503, 29 U.S.C. § 1133, requires every employee benefit plan to comply with Department of Labor regulations on giving notice to any participant or beneficiary whose claim for benefits has been denied, and affording a reasonable opportunity for review of the decision denying the claim. Under the civil enforcement provisions of § 502(a), a plan participant or beneficiary may sue to recover benefits due under the plan, to enforce the participant's rights under the plan, or to clarify rights to future benefits. Relief may take the form of accrued benefits due, a declaratory judgment on entitlement to benefits, or an injunction against a plan administrator's improper refusal to pay benefits. A participant or beneficiary may also bring a cause of action for breach of fiduciary duty, and under this cause of action may seek removal of the fiduciary. §§ 502(a)(2), 409. In an action under these civil enforcement provisions, the court in its discretion may allow an award of attorney's fees to either party. § 502(g). See Massachusetts Mutual Life Ins. Co. v. Russell, 473 U. S. 134 , 473 U. S. 147 (1985). In Russell, we concluded that ERISA's breach of fiduciary duty provision, § 409(a), 29 U.S.C.
Russell, supra, at 473 U. S. 147 , quoting Northwest Airlines, Inc. v. Transport Workers, 451 U. S. 77 , 451 U. S. 97 (1981). Our examination of these provisions made us "reluctant to tamper with an enforcement scheme crafted with such evident care as the one in ERISA." Russell, supra, at 473 U. S. 147 .
"Under the conference agreement, civil actions may be brought by a participant or beneficiary to recover benefits due under the plan, to clarify rights to receive future benefits under the plan, and for relief from breach of fiduciary responsibility. . . . [W]ith respect to suits to enforce benefit rights under the plan or to recover benefits under the plan which do not involve application of the title I provisions, they may be brought not only in U.S. district courts, but also in State courts of competent jurisdiction. All such actions in Federal or State courts are to be regarded as arising under the laws of the United States in similar fashion to those brought under section 301 of the Labor-Management Relations Act of 1947. "
Allis-Chalmers Corp. v. Lueck, 471 U.S. at 471 U. S. 220 . As we observed in Allis-Chalmers, the broad preemptive effect of § 301 was first analyzed in Teamsters v. Lucas Flour Co., 369 U. S. 95 (1962). In Lucas Flour, the Court found that
Id. at 369 U. S. 103 . "[I]n enacting § 301, Congress intended doctrines of federal labor law uniformly to prevail over inconsistent local rules." Id. at 369 U. S. 104 . Indeed, for purposes of determining federal jurisdiction, this Court has singled out § 301 of the LMRA as having
Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U. S. 1 , 463 U. S. 23 (1983), referring to Avco Corp. v. Machinists, 390 U. S. 557 (1968).
In Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. at 471 U. S. 746 , this Court rejected an interpretation of the saving clause of ERISA's express preemption provisions, § 514(b) (2)(A), 29 U.S.C. § 1144(b)(2)(A), that saved from preemption
"only state regulations unrelated to the substantive provisions of ERISA," finding that "[n]othing in the language, structure, or legislative history of the Act" supported this reading of the saving clause. Metropolitan Life, however, did not involve a state law that conflicted with a substantive provision of ERISA. Therefore the Court's general observation -- that state laws related to ERISA may also fall under the saving clause -- was not focused on any particular relationship or conflict between a substantive provision of ERISA and a state law. In particular, the Court had no occasion to consider in Metropolitan Life the question raised in the present case: whether Congress might clearly express, through the structure and legislative history of a particular substantive provision of ERISA, an intention that the federal remedy provided by that provision displace state causes of action. Our resolution of this different question does not conflict with the Court's earlier general observations in Metropolitan Life .
Considering the common-sense understanding of the saving clause, the McCarran-Ferguson Act factors defining the business of insurance, and, most importantly, the clear expression of congressional intent that ERISA's civil enforcement scheme be exclusive, we conclude that Dedeaux's state law suit asserting improper processing of a claim for benefits under an ERISA-regulated plan is not saved by § 514(b)(2)(A), and therefore is preempted by § 514(a). [ Footnote 4 ] Accordingly, the judgment of the Court of Appeals is