Court Opinion

ID: 4711935
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:37:38.603335+00
Date Added: 2024-06-11T08:06:02.925499
License: Public Domain

Johnson, J.
(dissenting) — The majority relies upon a
preemption analysis the United States Supreme Court has abandoned. See N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 115 S. Ct. 1671, 131 L. Ed. 2d 695 (1995). Applying the wrong analytical approach, the majority erroneously concludes that a case decided prior to Travelers is determinative. See majority at 437 (citing Puget Sound Elec. Workers Health & Welfare Trust Fund v. Merit Co., 123 Wn.2d 565, 870 P.2d 960 (1994)). Moreover, in an attempt to strengthen its result, the majority relies upon cases that do not support its conclusion. A careful analysis of case law following Travelers reveals, however, that the right of the International Brotherhood of Electrical Workers (IBEW) to collect compensation owed to its members under the public works lien laws is only remotely connected to ERISA. Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (codified as amended at 29 U.S.C. §§ 1001-1461) (ERISA). The claim in this case is not preempted.
Under 29 U.S.C. § 1144, all state laws are preempted to the extent they “relate to” any ERISA benefit plan. Prior to Travelers, the United States Supreme Court interpreted ERISA’s preemption clause expansively. See Shaw v. Delta Air Lines, 463 U.S. 85, 103 S. Ct. 2890, 77 L. Ed. 2d 490 (1983). The pr^-Travelers approach determined that a state law related to an employee benefit plan if it had a connection with or made reference to such a plan. Shaw, 463 U.S. at 97. Relying upon an expansive and literal interpretation, the Court found that state laws having even remote effects *444on ERISA plans related to them and were preempted. Shaw, 463 U.S. at 97; see also In re Estate of Egelhoff, 139 Wn.2d 557, 567 nn. 43-45, 989 P.2d 80 (1999) (citing cases decided under a broad interpretation), rev’d and remanded, 532 U.S. 141 (2001). Under the supremacy clause, we were required to apply the Court’s analysis to determine preemption.
The United States Supreme Court has since retreated from and abandoned such an expansive reading of ERISA’s text. Attempting to limit the seemingly endless reach the broad interpretation of “relates to” could yield, the Travelers Court determined that state laws with only a “ ‘tenuous, remote, or peripheral’ connection with covered plans” do not merit preemption. Travelers, 514 U.S. at 661 (quoting District of Columbia v. Greater Wash. Bd. of Trade, 506 U.S. 125, 130 n.1, 113 S. Ct. 580, 121 L. Ed. 2d 513 (1992)). The Court noted that state courts should now look to the “objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive.” Travelers, 514 U.S. at 656. Looking to these objectives and applying them in this case, the inescapable conclusion is that Congress never intended ERISA to serve as a shield for an employer to raise in order to prevent its employees from collecting benefits owed them by that employer.
A primary concern of Congress when enacting ERISA was the “ ‘mismanagement of funds accumulated to finance employee benefits and the failure to pay employees benefits from accumulated funds.’ ” Cal. Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., 519 U.S. 316, 326-27, 117 S. Ct. 832, 136 L. Ed. 2d 791 (1997) (quoting Massachusetts v. Morash, 490 U.S. 107, 115, 109 S. Ct. 1668, 104 L. Ed. 2d 98 (1989)). To remedy this mismanagement, Congress enacted comprehensive regulations that permitted the nationally uniform administration of employee benefit plans. Travelers, 514 U.S. at 657. It was not, however, Congress’ intention to create a law with such broad preemption powers so as to displace the traditional presumption against federal preemption of the state law. *445Travelers, 514 U.S. at 655. Under Travelers, when analyzing the connection between state law and ERISA regulations, courts must now apply the more common approach to preemption, starting with the presumption that Congress does not intend to supplant state law. Travelers, 514 U.S. at 654. This significantly narrows the scope of state law that is preempted.
Both the Ninth Circuit Court of Appeals and this court have recognized this new approach and have adopted the Travelers analysis. Egelhoff, 139 Wn.2d at 579 (ERISA does not preempt Washington’s dissolution laws when determining life insurance and pension plan beneficiaries); see Operating Eng’rs Health & Welfare Trust Fund v. JWJ Contracting Co., 135 F.3d 671 (9th Cir. 1998). In Egelhoff, we stated, “[t]he effect of Travelers and cases following justify retreat from the expansive preemption doctrine our court has previously followed to ensure ERISA’s objective of protecting workers .. . .” Egelhoff, 139 Wn.2d at 580. In the present case, however, the majority minimizes the importance of Egelhoff.
Egelhoff is distinguishable from this case because here our task, as in [Puget Sound Electrical Workers], involves delving into the relationship between Washington’s public works lien statutes and ERISA, not the statute dealing with the distribution of nonprobate assets upon dissolution of marriage.
Majority at 439. The majority superficially contrasts Egelhoff with Puget Sound Electrical Workers, based solely on the types of laws at issue. By doing so, the majority concludes Puget Sound Electrical Workers is determinative and Egelhoff does not have any bearing on this case. See majority at 439-40. I disagree.
A significant difference between Puget Sound Electrical Workers and Egelhoff exists that goes beyond the types of laws at issue in each case. In each of those cases, a very different preemption analysis was applied, which led to the different results. In Puget Sound Electrical Workers, we applied a broad, expansive interpretation of ERISA’s § 514(a), which we were required to do under Shaw. Puget *446Sound Elec. Workers, 123 Wn.2d at 568-69, 573; see Shaw, 463 U.S. at 95-98. In Egelhoff, we applied the narrower Travelers approach. By disregarding this shift in ERISA preemption, the majority avoids any meaningful application of the post -Travelers doctrine and reaches a conclusion inconsistent with current law.
The United States Supreme Court has cautioned against such an anachronistic approach. In reversing a decision of the Second Circuit Court of Appeals, the Court noted that the lower court “fail[ed] to give proper weight to Travelers’ rejection of a strictly literal reading of § 514(a).” De Buono v. NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S. 806, 812-13, 117 S. Ct. 1747, 138 L. Ed. 2d 21 (1997) (state tax on gross receipts of health care facilities was not preempted by ERISA). The majority makes the same mistake here.
The majority also discounts the Ninth Circuit’s application of Travelers. See JWJ Contracting Co., 135 F.3d 671. The majority cites to JWJ Contracting for the proposition that state laws providing remedies against third parties are preempted because those laws offer additional enforcement mechanisms. Majority at 440-41. That was the conclusion the Ninth Circuit reached in two pre-Travelers cases. See Trs. of Elec. Workers Health & Welfare Trust v. Marjo Corp., 988 F.2d 865 (9th Cir. 1992); Carpenters Health & Welfare Trust Fund v. Tri Capital Corp., 25 F.3d 849 (9th Cir. 1994). While those cases were correctly decided under Shaw, they are no longer good law.
The majority seriously misrepresents the Ninth Circuit’s decision in JWJ Contracting. There, the defendants argued that the Ninth Circuit’s pre-Travelers rulings were still good law and should be followed. While the Ninth Circuit agreed with the defendants’ assertion that the statutes in Marjo and Tri Capital were preempted because the statutes in both provided remedies against third parties, it in no way affirmed the continuing control of those cases. JWJ Contracting Co., 135 F.3d at 679. In fact, the court implied just the opposite, stating the Marjo and Tri Capital decisions relied on “expansive language from the Supreme Court *447demonstrating an understanding of ERISA pre-emption that has since been tailored to better fit Congress’s policy intentions.” JWJ Contracting Co., 135 F.3d at 679.
The majority’s misguided assessment of JWJ Contracting enables it once again to remain wholly unaccountable to the fundamental shift in preemption analysis. Avoiding this, the majority relies heavily upon a case decided under the Y>ve-Travelers doctrine to determine the outcome in this case, thus leading it further astray.
The continuing viability of Puget Sound Electrical Workers serves as the linchpin of the majority’s ruling. The majority cites this case for the proposition that the public works lien statutes at issue here provide an alternative funding mechanism and, therefore, are preempted under ERISA. Majority at 437. The majority concludes that Puget Sound Electrical Workers’ continued authority is evidenced by the fact the Travelers Court reaffirmed its previous holding in Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111 S. Ct. 478, 112 L. Ed. 2d 474 (1990). In Ingersoll-Rand, the United States Supreme Court held that a Texas state law providing an alternative enforcement mechanism was preempted. Ingersoll-Rand Co., 498 U.S. at 139-40. However, the Texas law involved a direct connection with ERISA rather than a remote one, as is the case here. Thus, the majority has misapplied Travelers.
At issue in Ingersoll-Rand was whether a common law cause of action in Texas for wrongful termination due to an employer’s desire to avoid contributing to an employee’s pension fund “related to” employee benefit plans. IngersollRand Co., 498 U.S. at 137-39. The Supreme Court ruled that it did. The decision turned on the fact that the existence of an ERISA plan was a critical factor in establishing liability. Ingersoll-Rand Co., 498 U.S. at 139-40. The majority fails to recognize that the Ingersoll-Rand decision was premised on the fact that the law was “ ‘specifically designed to affect employee benefit plans ....’” Ingersoll-Rand Co., 498 U.S. at 140 (quoting Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 829, 108 S. Ct. *4482182, 100 L. Ed. 2d 836 (1988)). The connection was direct and substantial. However, that was not the case in Puget Sound Electrical Workers, and is not the case here.
The public works lien laws at issue in Puget Sound Electrical Workers and in this case are laws of general applicability that are used by a class of creditors regardless of whether there is an ERISA plan. Thus, Travelers’ reaffirmation of Ingersoll-Rand’s holding has no bearing on whether Puget Sound Electrical Workers is good law.
Ingersoll-Rand expressly distinguished the Texas state cause of action from a “generally applicable statute that makes no reference to, or indeed functions irrespective of, the existence of an ERISA plan.” Ingersoll-Rand Co., 498 U.S. at 139. The Supreme Court pointed to its previous decision in Mackey (holding § 514(a) did not preempt a state’s general garnishment procedures) to demonstrate that, even under its broadest reading, § 514 did not preempt a state’s generally applicable statute that had only a tenuous connection with covered plans. Ingersoll-Rand Co., 498 U.S. at 139-40. This is the exact situation we are presented with here. The public works lien laws are generally applicable statutes available to an entire class of creditors, regardless of whether an ERISA plan exists.
Other courts reviewing the use of lien laws to collect delinquent ERISA fund contributions from third parties have also drawn an analogy between the issues in those cases and the Mackey decision:
“The United States Supreme Court has held that Congress did not intend to prohibit the use of state law garnishment procedures to execute judgments against ERISA benefit plans. Mackey, 486 U.S. at 831-32. If plans may use state law to collect on a judgment against a plan, certainly ERISA does not preempt the plan’s ability to use those procedures to collect a judgment on behalf of the plan.”
Haw. Laborers’ Trust Funds v. Maui Prince Hotel, 81 Haw. 487, 497, 918 P.2d 1143 (1996) (quoting Plumber’s Local 458 Holiday Vacation Fund v. Howard Immel, Inc., 151 Wis. 2d *449233, 238-39, 445 N.W.2d 43 (Ct. App. 1989)).
Similarly, after thoroughly reviewing the congressional intent behind ERISA, the Hawaii Supreme Court held that disallowing the use of lien laws to collect delinquent ERISA fund contributions was inconsistent with ERISA’s objective of protecting workers. Haw. Laborers’ Trust Funds, 81 Haw. at 497-500, 918 P.2d 1153-56. Ruling any other way, the Hawaii Supreme Court reasoned, would “ ‘ignore relevant federal policy and fly in the face of logic.’ ” Haw. Laborers’ Trust Funds, 81 Haw. at 500, 918 P.2d 1156 (quoting Haw. Carpenters’ Trust Funds v. Aloe Dev. Corp., 63 Haw. 566, 633 P.2d 1106, 1112-13 (1981)). I agree.
In this case, the lien laws are laws of general applicability. They have only tenuous connections with ERISA plans. Under Travelers, such a connection is not enough to overcome the presumption that Congress does not intend to supplant state law. Therefore, this court’s decision in Puget Sound Electrical Workers is no longer instructive and, to the extent it is no longer good law, is superseded by Egelhoff and Travelers.
The IBEW is attempting to collect funds owed to the employees. The public works lien statutes at issue here are generally applicable. They make no reference to an ERISA plan. The statute creates a procedural mechanism which is available to a class of creditors. Such laws often have only a “ ‘tenuous, remote, or peripheral’ connection with covered plans.” Travelers, 514 U.S. at 661 (quoting Greater Wash. Bd. of Trade, 506 U.S. at 130 n.1). It is Trig’s burden to prove Congress intended to supplant Washington’s lien laws. See De Buono, 520 U.S. at 814 (party asserting ERISA preemption bears a considerable burden of proving that Congress intended to preempt state law). Reliance upon outdated precedence does not suffice to meet this burden.
Using “the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive,” Travelers, 514 U.S. at 656, Congress did not intend to foreclose to employees established procedures for collecting benefits owed them. I would hold that the em*450ployees’ right to collect the benefits owed them has no direct connection to ERISA and preemption does not apply.
Smith, Talmadge, and Ireland, JJ., concur with Johnson, J.