Opinion ID: 668249
Heading Depth: 2
Heading Rank: 2

Heading: Does Maine's Law Nevertheless Relate To the IAEA Plan?

Text: 25 CMI further argues that Maine's workers' compensation law relates to an ERISA plan, and thus is preempted, because the law affects the cost of providing ERISA benefits to its employees. Specifically, CMI alleges that if it is forced to adopt a separate workers' compensation plan, the burdens of duplicate administration and the higher cost of separate workers' compensation benefits provided outside of the integrated IAEA Plan will have a significant economic impact on CMI and render CMI unable to afford the existing level of benefits now offered through the IAEA Plan. According to CMI, a state law that creates a significant economic impact on an ERISA plan, without more, sufficiently relates to the plan and is therefore preempted. E-Systems, Inc. v. Pogue, 929 F.2d 1100, 1103 (5th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 585, 116 L.Ed.2d 610 (1991); Travelers Ins. Co. v. Cuomo, 813 F.Supp. 996, 1002-06 (S.D.N.Y.1993). 5 26 To begin with, we decline to address whether a significant economic impact on an ERISA covered plan may be sufficient by itself to trigger preemption because CMI's argument fails regardless of how that issue is resolved. The argument fails for two reasons. First, CMI's claim is at odds with Shaw and Greater Washington Bd. of Trade, in which the Supreme Court explicitly contemplated state laws requiring the separate administration of workers' compensation plans without relating to existing ERISA plans. Greater Washington Bd. of Trade, --- U.S. at ----, 113 S.Ct. at 584-85; Shaw, 463 U.S. at 108, 103 S.Ct. at 2905-06. 27 Second, Maine's law, while having an economic impact on CMI, does not have an economic impact on the IAEA Plan itself. Clearly, any law that increases a company's cost of doing business can be said to affect that business's ability to provide benefits under its welfare benefit plan. This is not the same, however, as imposing burdens on the welfare benefit plan itself. The increased cost or administrative burdens imposed by the state law must have some connection to the covered ERISA plan before the preemption analysis can come into play. See United Wire, Metal and Machine Health & Welfare Fund v. Morristown Mem. Hosp., 995 F.2d 1179, 1193 (3d Cir.1993) (Where there is no direct nexus between a state statute and ERISA plans, no effect on the manner of such plans' conducting business or their ability to operate in interstate commerce, statutes have been upheld despite the fact that they may have the indirect ultimate effect of increasing plan costs.). 28 In requiring CMI to provide separate coverage for workers' compensation, Maine does not increase the operational expenses or input costs of the IAEA Plan, 6 nor does it impose any additional administrative burdens, benefit requirements, or other obligations on the IAEA Plan. Maine's law may increase CMI's cost of doing business, but it does not affect the IAEA Plan's cost of providing benefits or costs of administration. Should CMI choose voluntarily to change its coverage under the IAEA Plan in response to Maine's law, we consider such a decision to constitute, at most, an effect of the law that is too tenuous and remote to warrant preemption. See Employee Staffing Servs., Inc. v. Aubry, No. C-92-4096, 1993 WL 83310 (N.D.Cal.1993), aff'd, 20 F.3d 1038 (9th Cir.1994); cf. Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 831-32, 108 S.Ct. 2182, 2186-87, 100 L.Ed.2d 836 (1988) (finding generally applicable state garnishment law did not relate to ERISA covered plans even though the law might burden the administration of such plans); Aetna Life Ins. Co. v. Borges, 869 F.2d 142, 145-46 (2d Cir.), cert. denied, 493 U.S. 811, 110 S.Ct. 57, 107 L.Ed.2d 25 (1989) (finding state escheat law did not relate to ERISA plans and noting that ERISA does not preempt many laws that have a minimal, indirect impact on plan administration); Martori Bros. Distributors v. James-Massengale, 781 F.2d 1349, 1358-59 (9th Cir.), cert. denied, 479 U.S. 1018, 107 S.Ct. 670, 93 L.Ed.2d 722 (1986) (finding state unfair labor practices statute that required employers to pay damages based in part on fringe benefits employees would have received if employers had bargained in good faith did not relate to an ERISA plan). We find therefore that Maine's law does not relate to an ERISA covered plan and is not thereby preempted. 29 Accordingly, the order of the district court is affirmed.