Court Opinion

ID: 9483045
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:08:41.926688+00
Date Added: 2024-06-11T17:49:22.597144
License: Public Domain

BIRCH, Circuit Judge,
dissenting:
I respectfully dissent. At the outset I must acknowledge that the direction of decision in the courts, particularly in the wake of Ingersoll-Rand Co. v. McClendon, - U.S. -, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990), favors a finding of preemption. However, given the acknowledged, underlying purpose of ERISA to protect employees and beneficiaries in employee benefit plans,1 this case represents the point at which the preemption tide should be stayed. A finding of preemption in this case not only fails to further any such protective policy, it conceivably offers an unscrupulous employer a method of avoiding employee benefit “burdens.” An employer in this circuit can now hoodwink a long time employee and leave him stranded without any recourse whatsoever. This result stands the entire statutory scheme on its proverbial head.2
I.
The majority holds that the culmination of GM’s fraud — the creation of an ERISA plan — is also the very insulation of that fraud. The vehicle the majority uses to reach this surprising result is an overbroad reading of the precedent construing ERISA’s preemption language. Under ERISA, state laws are preempted to the extent that the laws “relate to” an ERISA plan.3 29 U.S.C. § 1144(a) (1988); McClendon, - U.S. at -, 111 S.Ct. at 482-83. In McClendon, the “law” found to be preempted was a judicially created cause of action against employers who fire employees in order to avoid paying pension benefits. The Supreme Court found that this very specific cause of action was preempted by ERISA because the law creating the cause of action
makes specific reference to, and indeed is premised on, the existence of a pension plan. In the words of the Texas court, the cause of action “allows recovery when the plaintiff proves that the principal reason for his termination was the employer’s desire to avoid contributing to or paying benefits under the employee’s pension fund.” [McClendon v. Ingersoll-Rand Co. ], 779 S.W.2d [69], at 71 [ (Tex.1989) ]. 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. Because the court’s inquiry must be directed to the plan, this judicially created cause of action “relate[s] to” an ERISA plan.
McClendon, - U.S. at -, 111 S.Ct. at 483 (emphasis added).
This passage demonstrates that McClen-don does not govern this case. The law creating Sanson’s cause of action is not a judicially created specific remedy that explicitly encompasses pension plans. Instead, Sanson relies upon Georgia’s basic *624and very general law of fraud — a law that encompasses any fraud, not just fraud relating to employers who deceive senior employees about potential future benefits. For this reason, the Georgia fraud law manifestly neither directly nor indirectly affects any ERISA plan, and is therefore distinguishable from the preempted law analyzed in McClendon.
As the majority concedes, the Georgia fraud law “does not involve the existence of a pension plan_” Ante, at 621. Nor does the Georgia law “make[ ] specific reference to” a pension plan. See McClendon, - U.S. at -, 111 S.Ct. at 483. Nor is the law “premised on” the existence of a pension plan. See id. Finally, the law upon which Sanson relies does not necessarily require him to plead the existence of a pension plan, necessarily require a court to find the existence of a pension plan, or necessarily require a finding that the employer wanted to cheat Sanson from his pension benefits.4 See id. All Sanson’s law requires is that he prove fraud, whatever that fraud may be. I submit that McClendon therefore does not govern this case. In fact, McClendon explicitly stated that it was not dealing with a case like Sanson’s: “We are not dealing here with a generally applicable statute that makes no reference to, or indeed functions irrespective of, the existence of an ERISA plan.” Id.
II.
The majority correctly acknowledges that “McClendon recognized certain limits to ERISA’s preemption clause: that a law normally would not be preempted if the statute did not require the establishment or maintenance of an ongoing plan, or if a statute makes no reference to, or functions irrespective of, a plan.” Ante, at 621. To refute my position that Georgia’s fraud law “functions irrespective” of ERISA plans and is therefore not preempted, the majority adopts a “but-for” relationship test. According to the majority, if a plaintiff’s lawsuit would not exist “but-for” a pension plan, that lawsuit is preempted by ERISA. E.g., ante, at 621 (“[T]he statute would not apply to this case without the existence of the retirement plan.”).
I disagree with such a test for ERISA preemption. To preempt a cause of action, it is not enough that the particular facts of a plaintiff’s claim happen to fortuitously involve a pension plan. Consider the employer who sexually harasses the female manager of a company’s pension plan. Her state law harassment claim would obviously not be preempted by ERISA simply because the harassment statute might “not apply to [her] ease without the existence of the retirement. plan.” See ante, at 621. Instead, her claim could be pursued because the harassment law would not necessarily require her to prove the existence of a plan, even if the law did require her to prove that the plan is what provided her with employment at the company.
The same is true in this case. The Georgia law of fraud only requires proof of a misrepresentation,5 and not necessarily proof of a misrepresentation about an ERISA plan. Apparently, the majority would not have had any difficulty if the benefit misrepresented had been the availability of a new Oldsmobile automobile instead of the availability of a special retirement program. But why should the substance of GM’s misrepresentation matter? The state fraud law utilized by Sanson does not portend to operate according to the content of the fraud; instead, all material frauds are equally actionable. Whether GM lies about a special retirement plan benefit or an Oldsmobile automobile benefit, the state law at issue still provides a cause of action.
This was not true about the law found to be preempted in McClendon. If the employer in McClendon fired the employee to avoid giving him the company Oldsmobile, the employer would not have a lawsuit *625under the judicial cause of action created by the Texas Supreme Court. Unlike this case, the law analyzed in McClendon only allowed suits against employers who fired employees to avoid paying pension benefits; it did not specifically, or even generally, encompass the firing of employees to avoid giving them cars. For this reason, the fraud law in this case does operate irrespective of the existence of a pension plan, even if the wrongful discharge cause of action in McClendon does not.
Accordingly, I believe that the mere fact that a plaintiffs proof of a material misrepresentation may involve the availability of a benefit (and that benefit happens to be a special retirement plan, rather than an Oldsmobile) should not be enough to preempt his putative fraud claim. Just as a sexual discriminatee would not lose her harassment claim solely because she might prove she was employed by a pension plan, Sanson should not lose his fraud claim solely because he might prove that his managers lied about future ERISA benefits. Both claims would not exist if a pension plan did not exist. But for me, that kind of “but-for” factual relationship is too tenuous to properly invoke the preemptive effect of ERISA.
III.
As a final note, it is important to realize that the difference in result between this case and McClendon is particularly disturbing. A careful review of McClendon in juxtaposition with the instant case demonstrates what troubles me. The judicially created cause of action in McClendon would have been preempted without a textual analysis of ERISA’s preemption section because ERISA provided the plaintiff' with an effective parallel federal cause of action. See McClendon, - U.S. at - - -, 111 S.Ct. at 484-86; see also 29 U.S.C. §§ 1140, 1132(a)(3), 1132(e)(1) (1988) (providing an ERISA cause of action for participants alleging that their employment was terminated to prevent the vesting of their pension benefits). That is not true in this case. Sanson has no parallel ERISA cause of action; indeed, the majority relies upon that fact in affirming the district court’s refusal to allow Sanson leave to amend his complaint. Ante, at 621.
Thus, the policy advanced in McClendon and served by ERISA’s preemptive force— forcing plaintiffs to assert federal causes of action in order to ensure uniform pension law and in order to adequately notify employers about pension obligations — is entirely absent in this case.- Allowing San-son’s claim would not conflict with (or even duplicate) federal law because no parallel federal lawsuit exists. And the only notification offered to employers is that they may lie to future retirees about potential future benefit plans without fear of repercussions, as long as the fraud at issue involves misrepresentations as to the very existence of a special retirement plan such that the fraud occurs in advance of any plan’s existence. In this way, the combination of the majority’s holdings — that San-son’s state cause of action is preempted by ERISA even while ERISA denies him any alternative remedy — is disappointingly pernicious to the very goals and desires that motivated Congress to enact pension laws in the first place.
In concluding I acknowledge the sage observation of the Fifth Circuit in Gonzales v. Prudential Insurance Co., 901 F.2d 446 (5th Cir.1990), that “any court forced to enter the ERISA preemption thicket sets out on a treacherous path.” Id. at 451-52. Perhaps I have entered the thicket and lost the path that my brothers have found and followed. However, if nothing else is clear it is that the “path” is not; obviously the Supreme Court needs to do some serious bushhogging in the ERISA preemption thicket.
I would reverse the district court’s determination that Sanson’s cause of action is preempted by ERISA. For this reason, I respectfully dissent.

. See, e.g., McClendon, - U.S. at-, 111 S.Ct. at 482; Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983); Nachwalter v. Christie, 805 F.2d 956, 960-61 (11th Cir.1986).

. I do not subscribe to the view that for every wrong there must necessarily be a remedy. However, where there is a remedy (here a state fraud action), I find it difficult to comprehend, in a common sense way, how a law enacted to protect the very class of individuals into which the appellant squarely fits can be construed to deny him such a preexisting remedy. I am concerned that by adopting such a judicial construction, a court could interpret its way into the province of the legislative branch, and in so doing thwart what Congress set out to accomplish in the first place.

.The majority is apparently confused by this point. In support of its preemption analysis, the majority states that "the misrepresentation relates to” the retirement plan and that there is a "relationship between the lawsuit and the special retirement plan.” Ante, at 621. Of course, that the misrepresentation and therefore the lawsuit relates to the plan does not prove that the law relates to the plan.

. Of course, in this case Sanson might in fact plead the existence of his employer’s pension plan. But the facts of his case require him to do that, not Georgia's law of fraud.

. See, e.g., Eckerd's Columbia, Inc. v. Moore, 155 Ga.App. 4, 270 S.Ed.2d 249, 250 (1980).