Court Opinion

ID: 9483412
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:19:56.345617+00
Date Added: 2024-06-11T17:49:37.172759
License: Public Domain

JOINER, Senior District Judge,
dissenting.
In this case we are asked whether the unmistakably broad preemption clause of ERISA obviates a Kentucky common law principle allowing integration of benefits payable under an ERISA-covered disability benefits plan and benefits paid under the Kentucky workers’ compensation system. In order for the ERISA preemption clause to apply, the state law — whether statutory or other — need only be found to “relate to” the ERISA-covered plan. 29 U.S.C. § 1144(a) (as amended 1989); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45, 107 S.Ct. 1549, 1552, 95 L.Ed.2d 39 (1987). The majority opinion concludes that the state common law principle at issue cannot be said to “relate to” plaintiffs ERISA-cov-ered plan because, notwithstanding the integration of benefits sanctioned by the common law, the benefits paid plaintiff under the plan “are calculated and paid to Saylor in the same manner and amount as they would be had she not qualified for workers’ compensation.” I believe that the majority opinion fails to give effect to the preemption clause by narrowly focusing upon the benefits paid to plaintiff through the plan as though the plan exists in a vacuum. The terms of the plan reveal that such a conclusion is at odds with the well-documented Congressional intent to create a “deliberately expansive” preemption clause “designed to ‘establish pension plan regulation as exclusively a federal concern.’ ” Pilot Life Ins. Co., 481 U.S. at 45, 107 S.Ct. at 1552 (quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523, 101 S.Ct. 1895, 1906, 68 L.Ed.2d 402 (1981)). Therefore, I dissent and would hold that the Kentucky common law principle permitting integration is preempted by § 1144(a) of ERISA..
The legislative history leaves no room to doubt the extraordinarily broad scope of ERISA. In Pilot Life Ins. Co., the Court recognized that “House and Senate sponsors emphasized both the breadth and importance of the pre-emption provisions,” and quoted Senator Williams:
It should be stressed that with the narrow exceptions specified in the bill, the substantive and enforcement provisions of the conference substitute are intended to preempt the field for Federal regulations, thus eliminating the threat of conflicting or inconsistent State and local regulation of employee benefit plans. This principle is intended to apply in its broadest sense to all actions of State or local governments, or any instrumentality thereof, which have the force or effect of law.
481 U.S. at 46, 107 S.Ct. at 1552 (quoting 120 Cong.Rec. [29197, 29933] (1974)). Determining how to apply the “relate to” language of the preemption clause in keeping with the intended broad sweep of that clause, the Court turned to its earlier pronouncement in Shaw v. Delta Airlines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983), that “[t]he phrase ‘relate to’ was given its broad commonsense meaning, such that a state law ‘relate^] 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. Co., 481 U.S. at 47, 107 S.Ct. at 1553 (quoting Shaw).
I read the language “connection with or reference to” as directing the courts to find a state law subject to the preemption clause if that law has any link with — any intended or even incidental effect upon— the administration of the ERISA-covered plan. In the instant case, I believe the necessary link between the common law principle and the plan is apparent upon comparison of the terms of the plan with the effect of integration of benefits:
6.3 Payment ... [N]o disability retirement benefit hereunder shall commence prior to the cessation of any accident or sickness benefit payments which an Employee retired because of permanent and total disability is entitled to receive for such disability under any insurance policy or programs or under any state or local legislation providing for benefits to permanently and totally dis*258abled persons (except under the federal Social Security Act and under any Workers’ Compensation law or occupational disease law) which are allocable to taxes, premiums, or other payments made by the Employer therefor.
The plan states that the disabled retired employee is not to receive income from more than one source at the employer’s expense, except in the form of social security and workers’ compensation benefits. In other words, when a plan beneficiary simultaneously meets the requirements for entitlement to plan benefits and workers’ compensation benefits, that beneficiary shall, under the terms of the ERISA-covered plan, receive both. Thus, when plaintiff became a plan beneficiary, the plan coverage was understood by the parties to preclude “double payment” by the employer in most cases but not in the case at bar. Here, the plan directs that plaintiff shall be compensated by both revenue streams, each undiminished by the other. That total sum constitutes the plan benefits. The Kentucky common law principle permitting integration of plaintiff’s plan benefits with her workers’ compensation entitlement resuits in plaintiff receiving revenue less than that specifically guaranteed to her by the terms of the plan. This result, in my view, demonstrates that the state law is connected to, indeed has a direct impact upon, the benefits conferred upon plaintiff under the terms .of the ERISA-covered plan. Thus, in permitting integration of benefits, the Kentucky courts have created a common law rule which relates to the ERISA-covered plan of which plaintiff is a beneficiary.
Simply stated, the plan contains an express provision regarding payments to beneficiaries which implies that the plan benefits and workers’ compensation benefits cannot be integrated. State law proscribes this, taking away the right of the parties to the plan to determine what, if any, impact additional entitlements may have upon the plan. Both Alessi, and Firestone Tire & Rubber Co. v. Neusser, 810 F.2d 550 (6th Cir.1987), require us to hold such a direct state law limitation upon administration of the ERISA-covered plan to be preempted by section 1144(a). I would reverse.