Self-Insurance Inst. of Am., Inc. v. Snyder

Decision Date04 August 2014
Docket NumberNo. 12–2264.,12–2264.
PartiesSELF–INSURANCE INSTITUTE OF AMERICA, INC., Plaintiff–Appellant, v. Rick SNYDER, in his official capacity as Governor of the State of Michigan; R. Kevin Clinton, in his official capacity as Director of the Office of Financial and Insurance Regulation of the State of Michigan; Andrew Dillon, in this official capacity as Treasurer of the State of Michigan, Defendants–Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

OPINION TEXT STARTS HERE

ARGUED:Stephen Wasinger, Stephen F. Wasinger PLC, Royal Oak, Michigan, for Appellant. Aaron D. Lindstrom, Office of the Michigan Attorney General, Lansing, Michigan, for Appellees. ON BRIEF:Stephen Wasinger, Stephen F. Wasinger PLC, Royal Oak, Michigan, John H. Eggertsen, Eggertsen Consulting PC, Ann Arbor, Michigan, for Appellant. John J. Bursch, Office of the Michigan Attorney General, Lansing, Michigan, for Appellees.

Ronald S. Lederman, Sullivan, Ward, Asher & Patton, P.C., Southfield, Michigan, Patricia J. Tarini, Edmond Prifti, Sachs Waldman, Detroit, Michigan, Richard C. Kraus, Foster, Swift, Collins & Smith, P.C., Lansing, Michigan, Joseph T. Aoun, Nuyen, Tomtishen And Aoun, P.C., Ann Arbor, Michigan, for Amici Curiae.

Before: BOGGS and MOORE, Circuit Judges; BARRETT, District Judge. *

OPINION

KAREN NELSON MOORE, Circuit Judge.

This case requires us, once again, to navigate the quagmire that is preemption. PlaintiffAppellant, Self–Insurance Institute of America, Inc. (SIIA), represents various sponsors and administrators of self-funded ERISA benefit plans, which it claims are affected by Michigan's Health Insurance Claims Assessment Act. SIIA argues that federal law—the Supremacy Clause, U.S. Const. art. VI, § 2, and ERISA's express-preemption provision, 29 U.S.C. § 1144(a)—prohibits the application of the Act to ERISA-covered entities. The Michigan statute, however, escapes the preemptive reach of federal law, and we AFFIRM the district court's dismissal of SIIA's suit.

I. BACKGROUND

In 2011, Michigan passed the Health Insurance Claims Assessment Act (the Act), 2011 Mich. Pub. Acts 142, codified at Mich. Comp. Laws §§ 550.1731–1741, to generate the revenue necessary to fund Michigan's obligations under Medicaid. The Act functions by imposing a one-percent tax on all “paid claims” by “carriers” or “third party administrators” to healthcare providers for services rendered in Michigan for Michigan residents. §§ 550.1732(s), 550.1733(1). “Carriers” include sponsors of “group health plan[s] set up under the strictures of the Employee Retirement Income Security Act of 1974 (ERISA), Pub.L. No. 93–406, codified at 29 U.S.C. §§ 1002–1461. Mich. Comp. Laws § 550.1732(a), (h). On top of the tax, every carrier and third-party administrator paying the tax must submit quarterly returns with the Michigan Department of the Treasury and “keep accurate and complete records and pertinent documents as required by the department.” §§ 550.1734(1), 550.1735(1). Every carrier and third-party administrator must also “develop and implement a methodology by which it will collect the [tax] subject to several conditions. § 550.1733a(2).

In district court, SIIA filed suit against Rick Snyder, the Governor of Michigan; R. Kevin Clinton, the Director of the Michigan Office of Financial and Insurance Regulation (“OFIR”); and Andrew Dillon, Treasurer of Michigan. R. 1 at 1 (Compl.) (Page ID # 1). SIIA sought a declaratory judgment, which would state that ERISA preempted the Act, and an injunction, which would prevent implementation and enforcement of the Act against the ERISA-covered entities. Id. The defendants filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a valid claim. R. 14 at 1 (Mot. to Dismiss) (Page ID # 33). The district court granted this motion after concluding that the Act did not offend ERISA's express-preemption clause because the Act did not ‘relate to’ an ERISA-governed benefit plan. R. 41 at 9 (Am. D. Ct. Order) (Page ID # 480) (quoting29 U.S.C. § 1144(a)). SIIA now appeals.

II. STANDARD OF REVIEW

We review de novo a district court's dismissal of a claim pursuant to Rule 12(b)(6). Penny/Ohlmann/Nieman, Inc. v. Miami Valley Pension Corp. (“PONI”), 399 F.3d 692, 697 (6th Cir.2005). Whether ERISA preempts a state law is a question of federal law that we also review de novo. Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 830, 108 S.Ct. 2182, 100 L.Ed.2d 836 (1988).

III. ANALYSIS

Congress enacted ERISA to ‘protect ... the interests of participants in employee benefit plans and their beneficiaries' by setting out substantive regulatory requirements for employee benefit plans and to ‘provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts.’ Aetna Health Inc. v. Davila, 542 U.S. 200, 208, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (quoting 29 U.S.C. § 1001(b)) (alteration and ellipses in original). Accordingly, ERISA makes plan administrators fiduciaries, see29 U.S.C. § 1104; imposes liabilities on plan administrators, see § 1109; requires plan administrators to disclose specific information and to file reports with the Secretary of Labor, see § 1021(a), (b); mandates that plan administrators retain records for substantial periods of time, see § 1027; and creates an exclusive enforcement mechanism, see § 1132. Along with these burdens, however, the statute also seeks “to provide a uniform regulatory regime over employee benefit plans.” Davila, 542 U.S. at 208, 124 S.Ct. 2488; see also Conkright v. Frommert, 559 U.S. 506, 130 S.Ct. 1640, 1649, 176 L.Ed.2d 469 (2010). Thus, ERISA contains a broad preemption provision that “supersede[s] any and all State laws insofar as they ... relate to any employee benefit plan” that falls under the regulation of the comprehensive federal scheme. 29 U.S.C. § 1144(a).

The Supreme Court has called ERISA's express-preemption provision “broadly worded” and “deliberately expansive.” California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., 519 U.S. 316, 324, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997) (internal quotation marks omitted). The Court, however, has found providing useful guidance in this area to be difficult and defining “relates to” to be a “frustrating” task. N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 656, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995). We readily concur. The statutory text is simply “unhelpful” because [i]f ‘relate to’ were taken to extend to the furthest stretch of its indeterminacy, then for all practical purposes pre-emption would never run its course, for [r]eally, universally, relations stop nowhere.’ Id. at 655–56, 115 S.Ct. 1671 (1995) (quoting Henry James, Roderick Hudson xli (New York ed., World's Classics 1980)); see also Dillingham, 519 U.S. at 335, 117 S.Ct. 832 (Scalia, J., concurring) ([A]pplying the ‘relate to’ provision according to its terms was a project doomed to failure, since, as many a curbstone philosopher has observed, everything is related to everything else.”). The best guidance that the Court has been able to give us is to say that [a] law ‘relates to’ an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96–97, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983).

SIIA contends that ERISA preempts the Act because the Act has an impermissible connection with employee benefit plans, namely that it (1) interferes with the administration of the plans; (2) imposes administrative burdens in addition to those prescribed by ERISA; and (3) interferes with the relationships between ERISA-covered entities. In their amicus briefs, the Iron Workers Health Fund of Eastern Michigan (“Iron Workers Fund”) and the Detroit and Vicinity Trowel Trades Health and Welfare Fund (“Trowel Trades Fund”) argue that the Act inappropriately references ERISA plans. The district court rejected both arguments. We agree and AFFIRM the dismissal of SIIA's claims.

A. “Connection With”

We begin with SIIA's allegations that the Act has an impermissible connection with ERISA plans. The district court rejected this argument in its entirety, finding that the Act was a law of ‘general applicability,’ R. 41 at 18 (D. Ct. Am. Order) (Page ID # 489) (quoting De Buono v. NYSA–ILA Med. & Clinical Servs. Fund, 520 U.S. 806, 820, 117 S.Ct. 1747, 138 L.Ed.2d 21 (1997)), that “does not mandate any particular benefit structure or bind administrators to certain benefits choices,” id. at 16 (Page ID # 487). On appeal, SIIA makes several, slightly different arguments as to different sections of the statute, and we address each in turn.

1. Legal Standard

In determining whether a state law has an impermissible connection with ERISA plans, we start with the presumption that Congress did not intend to preempt state laws, particularly in areas of traditional state concern. Travelers, 514 U.S. at 654, 115 S.Ct. 1671; Associated Builders & Contractors v. Michigan Dep't of Labor & Economic Growth, 543 F.3d 275, 280 (6th Cir.2008) (citing Dillingham, 519 U.S. at 332, 117 S.Ct. 832). In this case, we are concerned with a state tax and its ancillary requirements, a type of law long recognized as an important “attribute of state sovereignty.” Firestone Tire & Rubber Co. v. Neusser, 810 F.2d 550, 555 (6th Cir.1987) (citing County of Lane v. Oregon, 74 U.S. (7 Wall.) 71, 76–77, 19 L.Ed. 101 (1869)); see also Thiokol Corp. v. Roberts, 76 F.3d 751, 755 (6th Cir.1996) (citing Fair Assessment in Real Estate Ass'n, Inc. v. McNary, 454 U.S. 100, 103, 102 S.Ct. 177, 70 L.Ed.2d 271 (1981)). Therefore, the presumption applies with special force in this case, and overcoming it “requires two showings ...: (1) the law at issue must mandate (or effectively mandate) something, and (2) that mandate must fall within the area that Congress intended ERI...

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    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • 13 Octubre 2021
    ...But Canton did not raise those concerns in its briefing before us. So the argument is forfeited. See Self-Ins. Inst. of Am., Inc. v. Snyder , 761 F.3d 631, 641 (6th Cir. 2014) ("[W]hile an amicus may offer assistance in resolving issues properly before a court, it may not raise additional i......
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    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • 1 Julio 2016
    ...at 8–19) (Page ID #479–90). SIIA appealed, and we affirmed the district court's dismissal of the suit. Self–Ins. Inst. of Am., Inc. v. Snyder , 761 F.3d 631, 641 (6th Cir.2014), cert. granted, judgment vacated , ––– U.S. ––––, 136 S.Ct. 1355, 194 L.Ed.2d 399 (2016) (mem.). The Supreme Court......
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    • United States
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    • 13 Octubre 2021
    ...Canton did not raise those concerns in its briefing before us. So the argument is forfeited. See Self-Ins. Inst. of Am., Inc. v. Snyder, 761 F.3d 631, 641 (6th Cir. 2014) ("[W]hile an amicus may offer assistance in resolving issues properly before a court, it may not raise additional issues......
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    ...WL 2010790, at *3 (W.D. Tenn. May 19, 2010). To avoid getting lost in "the quagmire that is preemption," Self-Ins. Inst. of Am., Inc. v. Snyder, 761 F.3d 631, 633 (6th Cir. 2014), it is necessary to draw a distinction between complete preemption and ordinary preemption under ERISA. See 13D ......

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