Opinion ID: 4707273
Heading Depth: 1
Heading Rank: 2

Heading: Principles of ERISA Preemption

Text: In enacting ERISA, Congress included two distinct and powerful preemption provisions: complete preemption under ERISA § 502, 29 U.S.C. § 1132, and conﬂict preemption under ERISA § 514, 29 U.S.C. § 1144. The defendants assert that the claims in this case are conﬂict-preempted under the latter provision, which preempts “any and all State laws insofar as they may now or hereafter relate to any employee beneﬁt plan” covered by ERISA. The fundamental challenge in interpreting this preemption provision stems from its broad language: “If ‘relate to’ No. 20-2793 5 were taken to extend to the furthest stretch of its indeterminacy, then for all practical purposes pre-emption would never run its course….” New York State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655 (1995). But, on the other hand, Congress clearly intended ERISA preemption to be broad. Congress chose “deliberately expansive” language, “conspicuous for its breadth.” California Div. of Labor Standards Enf’t v. Dillingham Construction, N.A., Inc., 519 U.S. 316, 324 (1997), quoting Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384 (1992). Since the broad and vague statutory text oﬀers little help in drawing boundaries for ERISA conﬂict preemption, Travelers, 514 U.S. at 655, the Supreme Court “considers ERISA’s objectives ‘as a guide to the scope of the state law that Congress understood would survive.’” Rutledge v. Pharmaceutical Care Mgmt. Ass’n, 141 S. Ct. 474, 480 (2020), quoting Dillingham Construction, 519 U.S. at 325. Congress’s objective in enacting ERISA’s conﬂict preemption provision was “‘to ensure that plans and plan sponsors would be subject to a uniform body of beneﬁts law,’ thereby ‘minimiz[ing] the administrative and ﬁnancial burden of complying with conﬂicting directives’ and ensuring that plans do not have to tailor substantive beneﬁts to the particularities of multiple jurisdictions.” Id., quoting Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142 (1990). Guided by that objective, the Supreme Court has written that a law “relates to” an ERISA plan “if it has a connection with or reference to such a plan.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96–97 (1983) (state law requiring plans to pay speciﬁc beneﬁts was not enforceable against ERISA plans). This generally encompasses two categories of state laws. Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 319 (2016). First, 6 No. 20-2793 “[w]here a State’s law acts immediately and exclusively upon ERISA plans … or where the existence of ERISA plans is essential to the law’s operation …, that ‘reference’ will result in pre-emption.” Id. at 319–20, quoting Dillingham Construction, 519 U.S. at 325; see, e.g., Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 829 (1988) (“The Georgia statute at issue here expressly refers to—indeed, solely applies to—ERISA employee beneﬁt plans.”). Second, ERISA preempts a state statute or claim that, while not facially tied to ERISA, “‘governs … a central matter of plan administration’ or ‘interferes with nationally uniform plan administration.’” Gobeille, 577 U.S. at 320, quoting Egelhoﬀ v. Egelhoﬀ, 532 U.S. 141, 148 (2001) (preempting Washington beneﬁts rule that would create state-by-state diﬀerences in plan administration). State laws that directly prohibit something ERISA permits, and vice versa, fall into this second category. See, e.g., Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 524 (1981) (state law preempted “because it eliminates one method for calculating pension beneﬁts—integration—that is permitted by federal law”). But direct conﬂict is not always needed to show preemption. Some state laws that run parallel to or in harmony with ERISA’s requirements are nonetheless preempted. Gobeille, 577 U.S. at 323 (“even parallel[] regulations from multiple jurisdictions could create wasteful administrative costs and threaten to subject plans to wide-ranging liability”). Some parallel state rules, however, are not preempted. See Rutledge, 141 S. Ct. at 480 (“ERISA does not pre-empt state rate regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage.”), citing Travelers, 514 U.S. at 668. Relevant here, this second category of laws interfering No. 20-2793 7 with ERISA also includes state-law causes of action seeking “alternative enforcement mechanisms” as an end run around ERISA’s more limited remedial scheme. Travelers, 514 U.S. at 658, citing Ingersoll-Rand, 498 U.S. at 145 (ERISA preempted state-law claim for wrongful discharge based on employee’s allegation that employer ﬁred him to avoid making pension contributions); see also Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987) (ERISA preempted state-law claims for breach of contract and tort for alleged improper processing of claims for plan beneﬁts).