Aloha Airlines, Inc. v. Ahue

Decision Date21 December 1993
Docket NumberNos. 92-16881,92-16906,s. 92-16881
Citation12 F.3d 1498
Parties, 127 Lab.Cas. P 57,602, 17 Employee Benefits Cas. 2097 ALOHA AIRLINES, INC., Plaintiff-Appellee, v. Keith AHUE, Defendant-Appellant, and Air Line Pilots Association, International, Intervenor-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Girard D. Lau, Deputy Atty. Gen., Honolulu, HI, for defendant-appellant.

Eugene B. Granof, Air Line Pilots Ass'n, Intern., Washington, DC, for intervenor-appellant.

Richard M. Rand, Torkildson, Katz, Jossem, Fonseca, Jaffe, Moore & Hetherington, Honolulu, HI, for plaintiff-appellee.

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


POOLE, Circuit Judge:

Keith Ahue, the current Director of Labor and Industrial Relations for the State of Hawaii, and the Air Line Pilots Association, International ("ALPA") appeal the district court's summary judgment in favor of Aloha Airlines, Inc. ("Aloha") in Aloha's action seeking declaratory judgment that Hawaii Payment of Wages Law, Hawaii Revised Statute ("H.R.S.") Sec. 388-6(6) is preempted by section 514(a) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Sec. 1144(a). Ahue also appeals the district court's determination that H.R.S. Sec. 388-6(6) is not a generally applicable criminal law of a state under ERISA Sec. 514(b)(4), 29 U.S.C. Sec. 1144(b)(4), which saves such laws from ERISA preemption. We have jurisdiction over this appeal pursuant to 28 U.S.C. Sec. 1291, and we now affirm.

We review the district court's grant of summary judgment de novo. Greany v. Western Farm Bureau Life Ins. Co., 973 F.2d 812, 816 (9th Cir.1992). We also review de novo the district court's interpretation and application of ERISA provisions and its determination that ERISA preempts a state law. Ruocco v. Bateman, Eichler, Hill, Richards, Inc., 903 F.2d 1232, 1235-36 (9th Cir.), cert. denied, 498 U.S. 899, 111 S.Ct. 254, 112 L.Ed.2d 212 (1990).


Under Federal Aviation Administration ("FAA") regulations, airline pilots of the rank of captain and first officer must undergo semiannual and annual medical examinations, respectively, to maintain their Airline Transport Pilot ("ATP") Certificates. See 14 C.F.R. Sec. 61.151; 14 C.F.R. Sec. 67.13. These exams, the procedures of which are outlined in 14 C.F.R. Sec. 67.13, are intensive in nature and must be given by an FAA-certified physician. See 14 C.F.R. Sec. 67.23.

Pursuant to a collectively bargained labor agreement between Aloha and ALPA, the pilot employees' labor union, Aloha provides its pilot employees a choice of two comprehensive employee group medical plans: a Kaiser Permanente ("Kaiser") plan and a Hawaii Medical Service Association ("HMSA") plan. Aloha pays for the entire cost of each health care plan. The Kaiser plan covers the cost of one annual FAA-mandated medical examination, and the HMSA plan pays for an FAA-mandated examination only if the examination is required by a physician.

In June 1991, Mario E. Ramil, the Director of the Department of Labor and Industrial Relations ("DLIR") for the State of Hawaii and Ahue's predecessor, issued an opinion that H.R.S. Sec. 388-6(6), 1 which requires an employer to pay or provide for the cost of medical examinations mandated by federal law, applies to periodic medical examinations mandated by the FAA for airline pilots of the rank of captain or first officer.

In response to a letter from Aloha requesting that the DLIR reconsider its position, Ramil reaffirmed his opinion, stating that the Hawaii legislature intended H.R.S. Sec. 388-6(6) to require employers to pay any costs associated with mandatory examinations.

On April 17, 1992, Aloha filed a complaint against Ahue in federal district court seeking a declaration that H.R.S. Sec. 388-6(6) was preempted by ERISA Sec. 514(a), 29 U.S.C. Sec. 1144(a). On June 25, 1992, the magistrate judge permitted a motion for intervention by ALPA. Ahue moved for summary judgment on June 26, 1992. On September 3, 1992, Aloha filed a cross motion for summary judgment.

On October 13, 1992, the district court entered a judgment granting summary judgment in favor of Aloha and against Ahue. 807 F.Supp. 1501. On October 15, 1992, the court entered a judgment declaring that H.R.S. Sec. 388-6(6), to the extent it requires Aloha to provide or pay for those medical examinations of its pilots required by the FAA, is preempted by ERISA. Ahue and ALPA timely appeal.


ERISA is a comprehensive legislative scheme enacted by Congress "to promote the interests of employees and their beneficiaries in employee benefit plans." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983). In enacting ERISA, Congress also intended to safeguard employer's interests by "eliminating the threat of conflicting and inconsistent State and local regulation of employee benefit plans." Id. at 99, 103 S.Ct. at 2901 (quoting 120 Cong. Rec. 29197 (1974) (remarks of Rep. Dent)).

To ensure uniformity and consistency in such laws throughout the states, Congress included within ERISA "one of the broadest preemption clauses ever enacted by Congress." PM Group Life Ins. v. Western Growers Assur. Trust, 953 F.2d 543, 545 (9th Cir.1992) (quoting Evans v. Safeco Life Ins. Co., 916 F.2d 1437, 1439 (9th Cir.1990)). Section 514(a) of ERISA, 29 U.S.C. Sec. 1144(a), provides that the ERISA provisions "supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan...." 29 U.S.C. Sec. 1144(a). An "employee benefit plan" includes any "employee welfare benefit plan," 29 U.S.C. Sec. 1002(2)(B), (3). An "employee welfare benefit plan" comprises

any plan, fund, or program ... established or maintained by an employer or by an employee organization, or by both, ... for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 186(c) of this title (other than pensions on retirement or death, and insurance to provide such pensions).

29 U.S.C. Sec. 1002(1). 2


Ahue contends that the district court erred in holding that to the extent that H.R.S. Sec. 388-6(6) requires Aloha to pay or provide for periodic FAA-mandated medical examinations for its pilots, it is preempted by ERISA. Specifically, Ahue argues that H.R.S. Sec. 388-6(6) does not "relate to" an "employee welfare benefit plan" because it does not provide a "medical benefit" to a pilot within the scope of an ERISA employee welfare benefit plan. 3 Given Congressional policy underlying ERISA to promote and protect employee interests, Ahue argues, only those "medical benefits" that provide personal, direct, and immediate aid to a participant employee are within ERISA's purview. Ahue contends that an FAA-mandated medical examination is not a personal "medical benefit" under ERISA because unlike an ordinary medical examination, which a pilot undertakes voluntarily for personal health reasons, the FAA examination is a compelled obligation, undertaken by a pilot involuntarily to maintain his ATP flying certificate. In addition, the FAA examination, with its intensive tests designed to evaluate health conditions primarily relevant to a pilot's ability fly an airplane, does not provide a direct or immediate personal benefit to the pilot, and its purpose is not to safeguard the personal health and well-being of the pilot, but ensure the safety of the general public. Since the examination is not a "medical benefit" under ERISA, Ahue concludes, H.R.S. Sec. 388-6(6) is not governed by ERISA and necessarily cannot be preempted. 4

Whether an FAA-mandated medical examination constitutes a "medical benefit" within ERISA's purview cannot be conclusively determined from ERISA's language, its legislative history, or existing case law. ERISA itself does not further define the term "medical benefit." ERISA's legislative history also provides no specific guidance as to the meaning of this term. In addition, no federal cases have specifically considered the scope of a "medical benefit" under an ERISA plan.

Nevertheless, we are not persuaded by Ahue's contentions. Although the ultimate purpose of an FAA-mandated medical examination appears to be to ensure the safety of the general public, this purpose is achieved only by ensuring and safeguarding the pilot's personal health. The safety of a plane's passengers is inextricably linked to the personal health of the pilot charged with flying the plane. While the examination is geared primarily to test a pilot's ability to fly a plane safely, at the same time it evaluates various aspects of the pilot's health and provides the pilot with a direct and immediate assessment of his personal medical condition.

Furthermore, ERISA's legislative history does not suggest that Congress intended to limit the scope of employee "medical benefits" to encompass only those "benefits" that solely benefit an employee recipient. Moreover, the legislative history does not imply that Congress intended to distinguish between voluntarily obtained benefits and compelled benefits.

Finally, ERISA was enacted to promote and protect employer interests as well as employee interests. By including FAA-mandated medical examinations under ERISA's broad umbrella of "medical benefits," airline employers are protected from conflicting and disparate state and local regulation of these medical provisions in employee benefit plans.

For these reasons, and given ERISA's broad language and Congress' express intent to preempt the field of state laws pertaining...

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