District of Columbia v. Greater Washington Board of Trade

• Decision Date: 14 December 1992
• Docket Number: No. 91-1326,91-1326
• Citation: 113 S.Ct. 580,506 U.S. 125,121 L.Ed.2d 513
• Parties: The DISTRICT OF COLUMBIA and Sharon Pratt Kelly, Mayor, Petitioners, v. The GREATER WASHINGTON BOARD OF TRADE
• Court: U.S. Supreme Court

506 U.S. 125

113 S.Ct. 580

121 L.Ed.2d 513

The DISTRICT OF COLUMBIA and Sharon Pratt Kelly, Mayor, Petitioners,

v The GREATER WASHINGTON BOARD OF TRADE.

No. 91-1326.

Argued Nov. 3, 1992.

Decided Dec. 14, 1992.

Syllabus ^*

Section 2(c)(2) of the District of Columbia Workers' Compensation Equity Amendment Act of 1990 requires employers who provide health insurance for their employees to provide equivalent health insurance coverage for injured employees eligible for workers' compensation benefits. Respondent, an employer affected by this requirement, filed an action in the District Court against petitioners, the District of Columbia and its Mayor, seeking to enjoin enforcement of § 2(c)(2) on the ground that it is pre-empted by § 514(a) of the Employee Retirement Income Security Act of 1974 (ERISA), which provides that ERISA supersedes state laws that "relate to any employee benefit plan" covered by ERISA. Although petitioners conceded that § 2(c)(2) relates to an ERISA-covered plan, the court granted their motion to dismiss. Relying on this Court's decision in Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 77 L.Ed.2d 490, it held that § 2(c)(2) is not pre-empted because it also relates to respondent's workers' compensation plan, which is exempt from ERISA coverage, and because respondent could comply with the provision by creating a separate unit to administer the required benefits. The Court of Appeals reversed, holding that pre-emption of § 2(c)(2) is compelled by § 514(a)'s plain meaning and ERISA's structure.

Held: Section 2(c)(2) is pre-empted by ERISA. A state law "relate[s] to" a covered benefit plan for § 514(a) purposes if it refers to or has a connection with such a plan, even if the law is not designed to affect the plan or the effect is only indirect. See, e.g., Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 111 S.Ct. 478, ----, 112 L.Ed.2d 474. Section 2(c)(2) measures the required health care coverage by reference to "the existing health insurance coverage," which is a welfare benefit plan subject to ERISA regulation. It does not matter that § 2(c)(2)'s requirements also "relate to" ERISA-exempt workers' compensation plans, since ERISA's exemptions do not limit § 514's pre-emptive sweep once it is determined that a law relates to a covered plan. See Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 525, 101 S.Ct. 1895, 1907, 68 L.Ed.2d 402. Petitioners' reliance on Shaw, supra, is misplaced, since the statute at issue there did not "relate to" an ERISA-covered plan. Nor is there any support in Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 105 S.Ct. 2380, 85 L.Ed.2d 728, for their position that § 514(a) requires a two-part analysis under which a state law relating to an ERISA-covered plan would survive preemption if employers could comply with the law through separately administered exempt plans. Pp. ____.

292 U.S.App.D.C. 209, 948 F.2d 1317 (1991), affirmed.

THOMAS, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, BLACKMUN, O'CONNOR, SCALIA, KENNEDY, and SOUTER, JJ., joined. STEVENS, J., filed a dissenting opinion.

Donna M. Murasky, Washington, D.C., for petitioners.

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

Justice THOMAS delivered the opinion of the Court.

The District of Columbia requires employers who provide health insurance for their employees to provide equivalent health insurance coverage for injured employees eligible for workers' compensation benefits. We hold that this requirement is pre-empted by the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq.

I

ERISA sets out a comprehensive system for the federal regulation of private employee benefit plans, including both pension plans and welfare plans. A "welfare plan" is defined in § 3 of ERISA to include, inter alia, any "plan, fund, or program" maintained for the purpose of providing medical or other health benefits for employees or their beneficiaries "through the purchase of insurance or otherwise." § 3(1), 29 U.S.C. § 1002(1). Section 4 defines the broad scope of ERISA coverage. Subject to certain exemptions, ERISA applies generally to all employee benefit plans sponsored by an employer or employee organization. § 4(a), 29 U.S.C. § 1003(a). Among the plans exempt from ERISA coverage under § 4(b) are those "maintained solely for the purpose of complying with applicable workmen's compensation laws or unemployment compensation or disability insurance laws." § 4(b)(3), 29 U.S.C. § 1003(b)(3).

ERISA's pre-emption provision assures that federal regulation of covered plans will be exclusive. Section 514(a) provides that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered by ERISA. § 514(a), 29 U.S.C. § 1144(a). Several categories of state laws, such as generally applicable criminal laws and laws regulating insurance, banking, or securities, are excepted from ERISA pre-emption by § 514(b), 29 U.S.C. § 1144(b), but none of these exceptions is at issue here.

Effective March 6, 1991, the District of Columbia Workers' Compensation Equity Amendment Act of 1990, 37 D.C. Register 6890, amended several portions of the District's workers' compensation law, D.C. Code Ann. §§ 36-301 to 36-345 (1981 and Supp.1992). Section 2(c)(2) of the Equity Amendment Act added the following requirement:

"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 chapter." D.C. Code Ann. § 36-307(a-1)(1) (Supp.1992).

Under § 2(c)(2), the employer must provide such health insurance coverage for up to 52 weeks "at the same benefit level that the employee had at the time the employee received or was eligible to receive workers' compensation benefits." § 36-307(a-1)(3).

Respondent Greater Washington Board of Trade, a nonprofit corporation that sponsors health insurance coverage for its employees, filed this action against the District of Columbia and Mayor Sharon Pratt Kelly seeking to enjoin enforcement of § 2(c)(2) on the ground that the "equivalent"-benefits requirement is pre-empted by § 514(a) of ERISA. The District Court granted petitioners' motion to dismiss. App. to Pet. for Cert. 21a. Petitioners conceded that § 2(c)(2) "relate[s] to" an ERISA-covered plan in the sense that the benefits required under the challenged law "are set by reference to covered employee benefit plans." Id., at 22a. Relying on our opinion in Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983), however, the District Court held that § 2(c)(2) is not pre-empted because it also relates to respondent's workers' compensation plan, which is exempt from ERISA coverage, and because respondent could comply with § 2(c)(2) "by creating a 'separate administrative unit' to administer the required benefits." App. to Pet. for Cert. 24a (quoting Shaw, supra, at 108, 103 S.Ct. at 2905-2906).

The Court of Appeals reversed. 292 U.S.App.D.C. 209, 948 F.2d 1317 (1991). The court held that pre-emption of § 2(c)(2) is compelled by the plain meaning of § 514(a) and by the structure of ERISA. Id., at 215-216, 948 F.2d, at 1323-1324. In the court's view, ERISA pre-empts a law that relates to a covered plan and is not excepted from pre-emption by § 514(b), regardless of whether the law also relates to an exempt plan. Ibid. The Court of Appeals further concluded that this result would advance the policies and purposes served by ERISA pre-emption. Id., at 217-218, 948 F.2d, at 1325-1326. By tying the benefit levels of the workers' compensation plan to those provided in an ERISA-covered plan, "the Equity Amendment Act could have a serious impact on the administration and content of the ERISA-covered plan." Id., at 217, 948 F.2d, at 1325. Because the opinion below conflicts with the Second Circuit's decision in R.R. Donnelley & Sons Co. v. Prevost, 915 F.2d 787 (1990), cert. denied, 499 U.S. ----, 111 S.Ct. 1415, 113 L.Ed.2d 468 (1991), which upheld against a pre-emption challenge a Connecticut law sub stantially similar to § 2(c)(2), we granted certiorari. 503 U.S. ----, 112 S.Ct. 1584, 118 L.Ed.2d 303 (1992). We now affirm.

II

We have repeatedly stated that a law "relate[s] to" a covered employee benefit plan for purposes of § 514(a) "if it has a connection with or reference to such a plan." Shaw, supra, 463 U.S., at 97, 103 S.Ct., at 2900. E.g., Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 111 S.Ct. 478, 483, 112 L.Ed.2d 474 (1990); FMC Corp. v. Holliday, 498 U.S. 52, 58, 111 S.Ct. 403, ----, 112 L.Ed.2d 356 (1990); Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 829, 108 S.Ct. 2182, 2185, 100 L.Ed.2d 836 (1988); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47, 107 S.Ct. 1549, 1552-1553, 95 L.Ed.2d 39 (1987); Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 739, 105 S.Ct. 2380, 2389, 85 L.Ed.2d 728 (1985). This reading is true to the ordinary meaning of "relate to," see Black's Law Dictionary 1288 (6th ed.1990), and thus gives effect to the "deliberately expansive" language chosen by Congress. Pilot Life, supra, 481 U.S., at 46, 107 S.Ct. at 1552. See also Morales v. Trans World Airlines, Inc., 504 U.S. ----, ----, 112 S.Ct. 2031, 2037, 119 L.Ed.2d 157 (1992). Under § 514(a), ERISA pre-empts any state law that refers to or has a connection with covered benefit plans (and that does not fall within a § 514(b) exception) "even if the law is not specifically designed to affect such plans, or the effect is only indirect," Ingersoll-Rand, supra, 498 U.S., at 139, 111 S.Ct., at 483, and even if the law is "consistent with ERISA's substantive requirements," Metropolitan Life, supra, 471 U.S., at 739, 105 S.Ct., at 2389.¹

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