Opinion ID: 1192501
Heading Depth: 3
Heading Rank: 1

Heading: Cases Addressing the Term Relate To

Text: Shaw, supra, represents the Court's first look at the scope of ERISA's preemption clause. In the early 1980s, several airlines and other employers sought injunctive relief in federal court regarding the pregnancy provisions of the New York Human Rights Law and the New York Disability Benefits Law. Shaw, 463 U.S. at 88, 103 S.Ct. at 2895. The combined effect of the laws forbade employment discrimination on the basis of pregnancy and required employers to offer disability benefits for pregnancy and other nonoccupational disabilities. Id. at 88-90, 103 S.Ct. at 2895-96. The employers argued that, insofar as the New York Human Rights Law related to employee benefit plans, ERISA operated to preempt state law. Id. at 92, 103 S.Ct. at 2897. Seeking the broadest interpretation of the preemption clause, the employers claimed that the state could not directly regulate ERISA-covered benefit plans. Id. at 100-01, 103 S.Ct. at 2901-02. On the other hand, the New York Commission of Human Rights focused on section 514(d) of ERISA which provides, § 514(a) [the preemption clause] shall not `be construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States.' Id. The Commissioner contended that New York's Human Rights Law provided a means of enforcing the Pregnancy Discrimination Act of 1978 which made discrimination based on pregnancy unlawful under Title VII of the Civil Rights Act of 1964. Id. The United States Supreme Court held that the New York Humans Rights Law and Disability Benefits Law most definitely related to employee benefit plans. Id. at 96, 103 S.Ct. at 2899-2900. Applying the plain meaning test, by adopting the Black's Law Dictionary definition, [11] the Court held that, [a] law `relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan. Id. at 96-97, 103 S.Ct. at 2900. Because the New York Human Rights Law has a connection with or reference to employee benefit plans, the law could be preempted, but only insofar as it prohibit[ed] practices that [are] lawful under federal law. Id. at 108, 103 S.Ct. at 2906. Following Shaw, the United States Supreme Court in Metropolitan Life Ins., supra, addressed ERISA preemption involving a Massachusetts statute that required minimum mental health care benefits for residents covered by general health insurance policies. Noting that the ERISA preemption clauses were perhaps not a model of legislative drafting, the Court held that, although the Massachusetts's statute related to employee benefit plans, it was not preempted by ERISA because the state statute was one that regulated insurance. Metropolitan Life Ins., 471 U.S. at 739, 105 S.Ct. at 2388-89. In 1987, the Court, in Pilot Life Ins., supra, addressed ERISA preemption that concerned common law contract and tort claims against an insurance company that issued a group employer's policy. The Court held that: [t]here is no dispute that the common law causes of action asserted in Dedeaux's complaint related to an employee benefit plan and therefore fall under ERISA's express preemption clause, § 514(a). In both Metropolitan Life Ins. and Shaw, we noted the expansive sweep of the pre-emption clause. In both cases [t]he phrase `related to' was given its broad commonsense meaning, such that a state law `relate[s] to' a benefit plan `in the normal sense of the phrase, if it has a connection with or reference to such a plan[.]' Pilot Life Ins., 481 U.S. at 47, 107 S.Ct. at 1553 (citation omitted). See also The Meadows v. Employers Health Ins., 47 F.3d 1006, 1008-09 (9th Cir.1995). In 1988, the Court clarified the preemption issue in Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 108 S.Ct. 2182, 100 L.Ed.2d 836 (1988). In Mackey, the issue concerned the extent to which ERISA preempts Georgia's general garnishment statute and a specific Georgia statute expressly governing the garnishment of benefits due to employee welfare benefit plan participants. The issue was before the Court because judgment creditors of plan participants were attempting to garnish the plan participants' benefits. The Court had no trouble in concluding that Georgia's specific benefit garnishment statute relates to an employee benefit plan and is therefore preempted. As the Court stated, [t]he Georgia statute at issue here expressly refers toindeed, solely applies toERISA employee benefit plans. Id. at 829, 108 S.Ct. at 2185. Of particular interest is the Court's further comment: The possibility that [the Georgia statute] was enacted by the Georgia Legislature to help effectuate ERISA's underlying purpose... is not enough to save the state law from pre-emption. The pre-emption provision [of § 514(a) ] . . . displace[s] all state laws that fall within its sphere, even including state laws that are consistent with ERISA's substantive requirements. Id. With respect to Georgia's general garnishment statute, the Court held that employee welfare benefit plan payments can be garnished because ERISA does not preempt such state laws. The Court so held notwithstanding the argument that plan administrators become parties to a suit when an employee welfare benefit plan is garnished and must respond and deposit the demanded funds due the beneficiary-debtor, thereby incurring administrative burdens and costs. The Court held that Congress did not intend to forbid the use of state-law execution mechanisms against welfare benefit plan participants, even when those mechanisms prevent those participants from receiving their benefits. Id. at 836, 108 S.Ct. at 2188-89. In 1990, the United States Supreme Court addressed ERISA preemption in yet another case, FMC Corp., supra, relating to the subrogation of medical expenses. The Court held that the Pennsylvania statute in question had a reference to benefit plans governed by ERISA inasmuch as: [t]he statute states that [i]n actions arising out of the maintenance or use of a motor vehicle, there shall be no right of subrogation or reimbursement from claimants' tort recovery with respect to ... benefits ... paid or payable under section 1719. Section 1719 refers to [a]ny program, group contract or other arrangement for payment of benefits. These terms includ[e], but [are] not limited to, benefits payable by a hospital plan corporation or a professional health service corporation. FMC Corp, 498 U.S. at 59, 111 S.Ct. at 408 (brackets added). Another example of the Supreme Court's treatment of ERISA preemption is Ingersoll-Rand, supra . Ingersoll-Rand addressed whether ERISA preempts a state common-law claim that an employee was discharged unlawfully in order to prevent his attainment of benefits under an ERISA plan. Ingersoll-Rand, 498 U.S. at 137-38, 111 S.Ct. at 481-82. After emphasizing the breadth of the preemption clause, the Court explained the basis for that expansive scope: The key to § [514(a) ] is found in the words relate to. Congress used those words in their broad sense, rejecting more limited pre-emption language.... Moreover, to underscore its intent that § [514(a) ] be expansively applied, Congress used equally broad language in defining the State law that would be preempted. Such laws include all laws, decisions, rules, regulations, or other State action having the effect of law. 29 U.S.C. § 1144(c)(1). Id. at 138-39, 111 S.Ct. at 482-83 (brackets added). The Ingersoll-Rand Court went even further and stated that the state law must relate to a benefit plan in order for preemption to apply. Id. at 139, 111 S.Ct. at 482-83. The distinction between an ERISA plan and benefits was emphasized in Fort Halifax Packing, supra, where the Court said: The purposes of ERISA's pre-emption provision make clear that the ... statute in no way raises the types of concerns that prompted pre-emption. Congress intended pre-emption to afford employers the advantages of a uniform set of administrative procedures governed by a single set of regulations. This concern only arises, however, with respect to benefits whose provision by nature requires an ongoing administrative program to meet the employer's obligations. It is for this reason that Congress pre-empted state laws relating to plans, rather than simply to benefits. Only a plan embodies a set of administrative practices vulnerable to the burden that would be imposed by a patchwork scheme of regulation. Fort Halifax Packing, 482 U.S. at 11-12, 107 S.Ct. at 2217-18. Thus, in order to prevail, a plaintiff must plead, and the court must find, that an ERISA plan exists and the employer had a pension-defeating motive in terminating the employment. Ingersoll-Rand, 498 U.S. at 140, 111 S.Ct. at 483. Because the court's inquiry must be directed to the plan, this judicially created cause of action relate[s] to an ERISA plan as opposed to benefits. Id. In 1992, the Supreme Court dealt with ERISA preemption concerning a state statute involving health insurance coverage for injured workers eligible for worker' compensation benefits in District of Columbia v. Greater Washington Bd. of Trade, 506 U.S. 125, 113 S.Ct. 580, 121 L.Ed.2d 513 (1992). The Greater Washington Court stated that a state law is not preempted by ERISA if the state law has only a tenuous, remote, or peripheral connection with covered plans as is the case with many laws of general applicability. Id. at 130 n. 1, (citing Shaw, 463 U.S. at 100, n. 21, 103 S.Ct. at 2901 n. 21; Mackey, 486 U.S. at 830-38 & n. 12, 108 S.Ct. at 2185-2190 & n. 12). Thus, in summary, the Court, recognizing that Congress intended pre-emption to afford employers the advantages of a uniform set of administrative procedures governed by a single set of regulations[,] see Fort Halifax Packing, 482 U.S. at 11-12, 107 S.Ct. at 2217, has held that a state law directed at or having a reference to employee benefit plans, even if consistent with ERISA's substantive requirements, see Mackey, 486 U.S. at 829, 108 S.Ct. at 2185, relates to employee benefit plans and is thus expressly preempted by ERISA. It therefore follows that, under Mackey and Greater Washington, supra, a state law of general applicability is not expressly preempted by ERISA because it has only a tenuous, remote, or peripheral connection with covered plans. [12] In other words, state laws of general applicability do not fall within ERISA's sphere of regulation.