I really, really like this opinion, to paraphrase Sally Field’s perhaps most famous line (or perhaps not, since she never actually said it.) I like it because it deals really well, and out of a highly respected court, with a question that often bedevils not just courts, but also lawyers trying to determine the scope of preemption, which is how close does a state law claim have to come to impacting an ERISA governed benefit plan for it to be preempted on the thesis that the state law claim “relates” to the benefit plan. The trend in the case law is to recognize that the word relate is overbroad in this context, and to note that, in light of current Supreme Court jurisprudence, state law claims do not become preempted simply because they relate, in the common English language sense, in some general manner to an ERISA governed benefit plan. Rather, they only relate for these purposes, and are preempted, if the state law claim “interferes with the relationships among core ERISA entities [or] tends to control or supersede their functions,” thereby threatening to undermine “the uniformity of the administration of benefits that is ERISA’s key concern.” When, in contrast, the state law claims, if recovered upon, would not be paid by the plan itself and do not seek to impose peculiar, state by state, obligations on the plan’s administrators and fiduciaries, the state law claims do not relate to the ERISA governed plan for purposes of preemption analysis, and there is no preemption.
I suspect that one of the reasons this issue – of the scope of ERISA preemption – is difficult to handle at times is that there is a language barrier of sorts; as this case shows, relate has a specific meaning in the context of ERISA and ERISA preemption, and an entirely different and broader one when used as part of regular speech, including by lawyers. As a result, analyzing the scope of preemption under ERISA can become one of those areas of the law in which ERISA lawyers and other lawyers become “two peoples separated by a common language,” in the famous formulation.
The case, incidentally, is Stevenson v. Bank of New York, decided this week by the Second Circuit. You can find a copy of it here.