Greater Washington Bd. of Trade v. District of Columbia

• Citation: 948 F.2d 1317,292 U.S.App.D.C. 209
• Decision Date: 10 January 1992
• Docket Number: No. 91-7061,91-7061
• Parties: , 60 USLW 2339, 14 Employee Benefits Cas. 1791 GREATER WASHINGTON BOARD OF TRADE, Appellant, v. DISTRICT OF COLUMBIA and Sharon Pratt Dixon, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 1317

948 F.2d 1317

292 U.S.App.D.C. 209, 60 USLW 2339,

14 Employee Benefits Cas. 1791

GREATER WASHINGTON BOARD OF TRADE, Appellant, v. DISTRICT OF COLUMBIA and Sharon Pratt Dixon, Appellees.

No. 91-7061.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 22, 1991.

Decided Nov. 15, 1991.

Rehearing Denied Jan. 10, 1992.

Appeal from the United States District Court for the District of Columbia.

Lawrence P. Postol, Washington, D.C., for appellant.

Donna M. Murasky, Asst. Corp. Counsel, Office of the Corp. Counsel, with whom John Payton, Corp. Counsel, and Charles L. Reischel, Deputy Corp. Counsel, Washington, D.C., were on the brief for appellees. Martin B. White, Counsel, Office of the Corp. Counsel, Washington, D.C., also entered an appearance, for appellees.

Before MIKVA, Chief Judge, WALD and BUCKLEY, Circuit Judges.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge:

Appellant Greater Washington Board of Trade ("Board") is a nonprofit corporation that provides health insurance to its employees. The Board brought suit against appellees District of Columbia ("District") and Mayor Sharon Pratt Dixon seeking an injunction against the enforcement of a provision of the District of Columbia Workers' Compensation Equity Amendment Act of 1990 (D.C. Act 8-261) ("Equity Amendment Act" or "Act"), 37 D.C.Reg. 6890 (1990) (codified in scattered sections of D.C.CODE ANN. §§ 36-301 to -342.1 (Supp.1991)). The Board claimed that section 2(c)(2) of the Equity Amendment Act was preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), § 514(a), 29 U.S.C. § 1144(a) (1988). ¹ Appellees filed a motion to dismiss the complaint, arguing that the Act was not preempted by ERISA. On March 27, 1991, the district court granted appellees' motion to dismiss and denied the Board's motion for a preliminary injunction. See Greater Wash. Bd. of Trade v. District of Columbia, No. 91-00511 (D.D.C. Mar. 27, 1991) ("Memorandum Opinion") at 2. Because we find that the plain meaning of ERISA's preemption provision as well as the policies and purposes furthered by ERISA preemption compel the conclusion that section 2(c)(2) of the Equity Amendment Act is preempted, we reverse.

I. BACKGROUND

A. The Equity Amendment Act

The Equity Amendment Act became effective on March 6, 1991. ² The Act amended portions of the District's workers' compensation law, D.C.CODE ANN. §§ 36-301 to -345 (1981 & Supp.1991), "in order to promote a fairer system of compensation, facilitate a more expeditious processing of claims, and establish a Commission to study the procedure and method of ratemaking for workers' compensation insurance," Equity Amendment Act preamble. Although the Act amended several sections of the workers' compensation law, the only relevant provision on this appeal is the following:

(1) Any employer who provides health insurance coverage for an employee shall provide health insurance coverage equivalent to the existing health insurance coverage of the employee while the employee receives or is eligible to receive workers' compensation benefits under this act.

....

(3) The provision of health insurance coverage shall not exceed 52 weeks and shall be at the same benefit level that the employee had at the time the employee received or was eligible to receive workers' compensation benefits.

Equity Amendment Act § 2(c)(2) (codified at D.C.CODE ANN. § 36-307(a-1)(1), (3) (Supp.1991)). By its terms, the Act requires employers to provide health benefits to employees eligible for workers' compensation benefits only if the employers already provide health benefits under a different plan.

The original version of the bill did not require employers to provide benefits to employees receiving workers' compensation; however, a substitute bill containing the provision for health benefits was passed by the Committee on Housing and Economic Development on July 6, 1990. ³ Section 2(c)(2) of the substitute bill read as follows:

Any employer who provides health insurance coverage for an employee shall maintain the health insurance coverage of the employee while the employee receives or is eligible to receive workers' compensation benefits under this act.

D.C.Bill 8-74 (as amended), § 2(c)(2) (1990) (emphasis added). ⁴ The Council amended the bill once again before it was passed. The portion of the substitute bill italicized above was replaced by the language eventually included in the Act:

Any employer who provides health insurance coverage for an employee shall provide health insurance coverage equivalent to the existing health insurance coverage of the employee while the employee receives or is eligible to receive workers' compensation benefits under this act.

Equity Amendment Act § 2(c)(2) (codified at D.C.CODE ANN. § 36-307(a-1)(1) (Supp.1991)) (emphasis added).

B. ERISA

ERISA was enacted in 1974 as a statutory scheme the primary purpose of which was to protect

the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts.

ERISA § 2(b) (codified at 29 U.S.C. § 1001(b) (1988)). ERISA defines an "employee benefit plan" as either an employee welfare benefit plan--which generally provides for some combination of medical, health, sickness, accident, disability, death, or unemployment benefits--or an employee pension benefit plan--which generally provides for retirement income. Id. § 3(1)-(3) (codified at 29 U.S.C. § 1002(1)-(3) (1988)).

Section 514(a) of ERISA expressly provides for the preemption of state law:

Except as provided in subsection (b) of this section, the provisions of this title and title IV shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 4(a) and not exempt under section 4(b).

Id. § 514(a) (codified at 29 U.S.C. § 1144(a) (1988)). ⁵

The scope of ERISA's coverage, and the exceptions to that coverage, are defined in section 4:

(a) Except as provided in subsection (b) and in sections 201, 301, and 401 [provisions defining coverage more narrowly for certain purposes], this title shall apply to any employee benefit plan if it is established or maintained--

(1) by any employer engaged in commerce or in any industry or activity affecting commerce; or

(2) by any employee organization or organizations representing employees engaged in commerce or in any industry or activity affecting commerce; or

(3) by both.

(b) The provisions of this title shall not apply to any employee benefit plan if--

....

(3) such plan is maintained solely for the purpose of complying with applicable work[ers'] compensation laws or unemployment compensation or disability insurance laws.

Id. § 4 (codified at 29 U.S.C. § 1003 (1988)).

II. DISCUSSION

A. Preemption

Although the Supremacy Clause ⁶ invalidates state laws that "interfere with, or are contrary to the laws of Congress," Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 211, 6 L.Ed. 23 (1824), the exercise of federal supremacy is not lightly to be presumed. See Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 522, 101 S.Ct. 1895, 1905-06, 68 L.Ed.2d 402 (1981); New York State Dep't of Social Servs. v. Dublino, 413 U.S. 405, 413, 93 S.Ct. 2507, 2513, 37 L.Ed.2d 688 (1973). In deciding whether a federal law preempts a state statute, the court's task "is to ascertain Congress' intent in enacting the federal statute at issue." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 95, 103 S.Ct. 2890, 2899, 77 L.Ed.2d 490 (1983). Preemption "may be either express or implied, and [it] 'is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose.' " Fidelity Fed. Sav. & Loan Ass'n v. De la Cuesta, 458 U.S. 141, 152-53, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982) (quoting Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977)).

1. Legislative History

Congress expressly provided in section 514(a) of ERISA for federal preemption of all state laws that "relate to" ERISA-covered plans. In favorably reporting the bill to the full Senate, the Committee on Labor and Public Welfare explained that

[b]ecause of the interstate character of employee benefit plans, the Committee believes it essential to provide for a uniform source of law in the areas of vesting, funding, insurance and portability standards, for evaluating fiduciary conduct, and for creating a single reporting and disclosure system in lieu of burdensome multiple reports.

S.REP. No. 127, 93d Cong., 1st Sess. 35 (1973), reprinted in 1974 U.S.C.C.A.N. 4838, 4871. ⁷ Similarly, the House Committee on Education and Labor observed that "it is evident that the operations of employee benefit plans are increasingly interstate. The uniformity of decision which the Act is designed to foster will help administrators, fiduciaries and participants to predict the legality of proposed actions without the necessity of reference to varying laws." H.R.REP. No. 533, 93d Cong., 1st Sess. 12 (1973), reprinted in 1974 U.S.C.C.A.N. 4639, 4650. ⁸

Although both the House and Senate recognized the need for broad federal preemption in the area of employee benefit plans, the original bills contained preemption language significantly narrower than the version ultimately adopted by Congress. The earlier Senate version provided only for the preemption of all state laws that "relate to the subject matters regulated by this Act or the Welfare and Pension Plans Disclosure Act." H.R. 2 (Senate version), 93d Cong., 2d Sess. § 699(a) (1974). ⁹ The House version preempted only those laws that ...