Does ERISA Pre-empt a
Particular State´s law?
The U.S. Supreme Court
recently issued an opinion in the case of Egelhoff v. Egelhoff, on Mar. 21,
2001.
This case addressed the
often thorny issue of whether ERISA pre-empts a particular state law. Â Washington passed a law essentially cutting
off divorced spouses who were named as beneficiaries for insurance policies,
pension plans, etc. during the marriage. Â
Mr. Egelhoff was killed in an auto accident two months after his divorce
became final. Â The former Mrs. Egelhoff
was still listed on his Boeing life insurance policy and pension plan. Â The Washington Supreme Court held that the
state statute barred Mrs. Egelhoff from collecting, and ordered distribution to
Mr. Egelhoff''s children by a previous marriage.
The Supreme Court reversed,
with Justice Thomas writing for a 7-2 majority. The Court reaffirmed the
"clearly expansive" nature of ERISA''s pre-emption section, 29 U.S.C.
sec. 1144(a), which provides that ERISA "shall supersede any and all State
laws insofar as they . . . relate to any employee benefit plan." Â The Washington statute, by determining
beneficiary status, "governs the payment of benefits, a central matter of
plan administration." Â The Court
further held that it would be impractical to force plan administrators to know
the laws of all 50 states, and the end result would be more litigation and
delay in payments contrary to ERISA''s purpose.
Justices Breyer and Stevens
dissented, and warned that the Court''s decision would apply equally to similar
statutes in nearly every state that cut off a beneficiary who murders the
benefactor.
If you have questions
regarding this issue, or would like a copy of the complete Supreme Court
decision, contact Dale Harris at 218.529.2424 or doh[at]hanftlaw.co .