Plaintiffs’ attorneys often will attempt to assert state law claims against an ERISA plan administrator. It’s possible they don’t know any better. It’s also possible, though, that they try to hammer the same point in case after case, and hope to find a judge who will agree with them. The most likely state law claims are for bad faith or unfair claim practices. Though it is easy enough to cite the broad preemption provisions in ERISA – and they are very broad – it can only help to explain the policy underlying the preemption:
[T]he detailed provisions of [ERISA] set forth a comprehensive civil enforcement scheme that represents a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans. The policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA-plan participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA.
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987).
As the Supreme Court reiterated in Aetna Health Inc. v. Davila, 542 U.S. 200, 209 (2004): “any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted.”
A plaintiff may argue that the state legislature or state court also was looking to advance important interests when it passed the consumer-protection law at issue, or when it established the common-law rule being advanced. Shouldn’t the state’s interests be protected as well? Not according to Congress and the Supreme Court: “Requiring ERISA administrators to master the relevant laws of 50 States and to contend with litigation would undermine the congressional goal of minimizing the administrative and financial burdens on plan administrators – burdens ultimately borne by the beneficiaries.” Egelhoff v. Egelhoff ex rel. Breiner 532 U.S. 141, 149-50 (2001).
The reasoning for this conclusion is clear when viewed in light of the congressional policy. An employer that establishes a benefit plan “undertakes a host of obligations, such as determining the eligibility of claimants, calculating benefit levels, making disbursements, monitoring the availability of funds for benefit payments, and keeping appropriate records in order to comply with applicable reporting requirements. The most efficient way to meet these responsibilities is to establish a uniform administrative scheme, which provides a set of standard procedures to guide processing of claims and disbursement of benefits.” Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 9 (1987). This is especially true when employers employ workers in several states; it would certainly increase costs, and decrease the likelihood that the employers will provide robust benefits, if they were required to vary their administration of those benefit plans depending on the residence or workplace of individual employees.