May 22, 2013 Articles

ERISA Conflict Preemption: Embracing the Treacherous Path

Do not shrink from using ERISA conflict preemption as a defense.

By Gillian W. Egan

“Relate to.” These two words have earned ERISA lawyers more dollars and given judges more heartburn than most any other two words that a legislative body has drafted. They come from the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. § 1001 et seq., a federal law that sets uniform standards for private employee pension plans and other benefit plans. The statute, designed to protect private benefit plans from mismanagement and fraud, includes a “preemption clause” which provides as follows:

Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title . . .

29 U.S.C.A. § 1144 (emphasis added). So what does it mean, to “relate to any employee benefit plan”? Despite a series of increasingly grumpy judicial opinions, the answer to that question remains unclear.

In 1997, Justice Scalia groused that “applying the ‘relate to’ provision according to its terms was a project doomed to failure, since, as many a curbstone philosopher has observed, everything is related to everything else.” California Division of Labor Standards Enforcement v. Dillingham Construction, N.A., Inc., 519 U.S. 316, 335–36 (1997) (Scalia concurring). Justice Ginsburg referred to the “unjust and increasingly tangled ERISA regime” in her 2002 concurrence in Aetna Health Inc. v. Davila, 542 U.S. 200, 222 (2004), a landmark ERISA preemption case.

Eleventh Circuit Judge Birch quoted his Fifth Circuit companions when he complained that “any court forced to enter the ERISA preemption thicket sets out on a treacherous path.” Sanson v. Gen. Motors Corp., 966 F.2d 618 (11th Cir. 1992) (Birch, J., dissenting). And in 2012, Sixth Circuit Judge Gilbert Merritt collected in a dissenting opinion a series of complaints from an unhappy judiciary, a “chorus” of jurists begging Congress to be more specific about their intentions with section 1144. McLemore v. Regions Bank, 682 F.3d 414, 427 (6th Cir. 2012) (Merritt, J., dissenting).

Congress has confidently ignored these and other pleas from its federal fellows in the judicial branch, and the definition of “relate to” in the context of ERISA preemption remains a rare creation of federal common law, sprung out of years of judicial wrangling with the imprecise words of the statute. Tangled though it may be, the legal advocates who would work on ERISA cases must endeavor to understand what federal judges have grudgingly attempted to delineate in the face of legislative vagueness.

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