The Supreme Court/The Supreme Court.iso/pc/ascii/1991/91_1326/91_1326.zd

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SUPREME COURT OF THE UNITED STATES
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No. 91-1326
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THE DISTRICT OF COLUMBIA and SHARON PRATT
KELLY, MAYOR, PETITIONERS v. THE GREATER
WASHINGTON BOARD OF TRADE
on writ of certiorari to the united states court
of appeals for the district of columbia circuit
[December 14, 1992]

  Justice Stevens, dissenting.
  The basic question that this case presents is whether
Congress intended to prevent a State from computing
workmen's compensation benefits on the basis of the
entire remuneration of injured employees when a portion
of that remuneration is provided by an employee benefit
plan.  By converting unnecessarily broad dicta interpreting
the words -relate to- as used in 514(a) of the Employee
Retirement Income Security Act of 1974 (ERISA), 29
U. S. C. 1144(a), into a rule of law, and by underestimat-
ing the significance of the exemption of workmen's com-
pensation plans from the coverage of the Act, the Court
has reached an incorrect conclusion in an unusually
important case.
  In today's world the typical employee's compensation is
not just her take-home pay; it often includes fringe
benefits such as vacation pay and health insurance.  If an
employee loses her job, by reason of either a wrongful
discharge or a negligently inflicted physical injury, normal
contract or tort principles would allow her to recover
damages measured by her entire loss of earnings-includ-
ing the value of fringe benefits such as health insurance.
If I understand the Court's reasoning today, a state
statute that merely announced that basic rule of damages
law would be pre-empted by ERISA if it -specifically
refers- to each component of the damages calculation.
Ante, at 4.
  Workmen's compensation laws provide a substitute for
tort actions by employees against their employers.  They
typically base the amount of the compensation award on
the level of the employee's earnings at the time of the
injury.  In the District of Columbia's workers' compensa-
tion law, for example, an employee's -average weekly
wages- provide the basic standard for computing the
award regardless of the nature of the injury.  D. C. Code
Ann. 36-308 (1988 and Supp. 1992).  Because an em-
ployee who receives health insurance benefits typically has
a correspondingly reduced average weekly wage, the
District decided to supplement the standard level of
workers' compensation with a component reflecting any
health insurance benefits the worker receives.  The Court
seems to be holding today that such a supplement may
never be measured by the level of the employee's health
insurance coverage-at least if the state statutes or
regulations specifically refer to that component of the
calculation.
  It is true, as the Court points out, that in Shaw v.
Delta Air Lines, Inc., 436 U. S. 85, 96-97 (1983), we
stated that a law -related to- an employee benefit plan,
-in the normal sense of the phrase, if it has a connection
with or reference to such a plan.-  It is also true that we
have repeatedly quoted that language in later opinions.
Indeed, it has been reiterated so often that petitioner did
not challenge the proposition that the statute at issue in
this case -related to- respondent's ERISA plan.  It never-
theless is equally true that until today that broad reading
of the phrase has not been necessary to support any of
this Court's actual holdings.
  Given the open-ended implications of today's holding and
the burgeoning volume of litigation involving ERISA pre-
emption claims, I think it is time to take a fresh look
at the intended scope of the pre-emption provision that
Congress enacted.  Let me begin by repeating the qualify-
ing language in the Shaw opinion itself and by emphasiz-
ing one word in the statutory text that is often over-
looked.
  After explaining why the two New York statutes at
issue related to benefit plans, we noted:
-Some state actions may affect employee benefit plans
in too tenuous, remote, or peripheral a manner to
warrant a finding that the law `relates to' the plan.
Cf. American Telegram and Telegraph Co. v. Merry,
592 F. 2d 118, 121 (CA2 1979) (state garnishment of
a spouse's pension income to enforce alimony and
support orders is not pre-empted).  The present
litigation plainly does not present a borderline ques-
tion, and we express no views about where it would
be appropriate to draw the line.-  Id., at 100, n. 21.

  In deciding where that line should be drawn, I would
begin by emphasizing the fact that the so-called -pre-
emption- provision in ERISA does not use the word -pre-
empt.-  It provides that the provisions of the federal
statute shall -supersede any and all State laws insofar as
they may now or hereafter relate to any employee benefit
plan described in section 1003(a) of this title and not
exempt under section 1003(b) of this title.-  29 U. S. C.
1144(a) (emphasis added).  Thus the federal statute
displaces state regulation in the field that is regulated by
ERISA; it expressly disavows an intent to supersede state
regulation of exempt plans; and its text is silent about
possible pre-emption of state regulation of subjects not
regulated by the federal statute.  Thus, if we were to
decide this case on the basis of nothing more than the
text of the statute itself, we would find no pre-emption
(more precisely, no -supersession-) of the District's regula-
tion of health benefits for employees receiving workers'
compensation because that subject is entirely unregulated
by ERISA.
  I would not decide this case on that narrow ground,
however, because both the legislative history of ERISA
and prior holdings by this Court have given the superses-
sion provision a broader reading.  Thus, for example, in
Shaw itself we held that the New York Human Rights
Law, which prohibited employers from structuring their
employee benefit plans in a manner that discriminated on
the basis of pregnancy, was pre-empted even though
ERISA did not contain any superseding regulatory provi-
sions.  463 U. S., at 98.  State laws that directly regulate
ERISA plans, or that make it necessary for plan adminis-
trators to operate such plans differently, -relate to- such
plans in the sense intended by Congress.  In my opinion,
a State law's mere reference to an ERISA plan is an
insufficient reason for concluding that it is pre-empted-
particularly when the state law itself is related almost
solely to plans that Congress expressly excluded from the
coverage of ERISA.  It is anomalous to conclude that
ERISA has superseded state regulation in an area that is
expressly excluded from the coverage of ERISA.
  The statute at issue in this case does not regulate any
ERISA plan or require any ERISA plan administrator to
make any changes in the administration of such a plan.
Although the statute may grant injured employees who
receive health insurance a better compensation package
than those who are not so insured, it does so only to
prevent a converse windfall going to injured employees
who receive high weekly wages and little or no health
insurance coverage.  Even if the District's statute did
encourage an employer to pay higher wages instead of
providing better fringe benefits, that would surely be no
reason to infer a congressional intent to supersede state
regulation of a category of compensation programs that it
exempted from federal coverage.  Moreover, by requiring
an injured worker's compensation to reflect his entire pay
package, the statute attempts to replace fully the lost
earning power of every injured employee.  Nothing in
ERISA suggests an intent to supersede the State's efforts
to enact fair and complete remedies for work-related
injuries; it is difficult to imagine how a State could
measure an injured worker's health benefits without
referring to the specific health benefits that worker
receives.  Any State that wishes to effect the equitable
goal of the District's statute will be forced by the Court's
opinion to require a predetermined rate of health insur-
ance coverage that bears no relation to the compensation
package of each injured worker.  The Court thereby
requires workers' compensation laws to shed their most
characteristic element: postinjury compensation based on
each individual workers' preinjury level of compensation.
  Instead of mechanically repeating earlier dictionary
definitions of the word -relate- as its only guide to deci-
sion in an important and difficult area of statutory
construction, the Court should pause to consider, first, the
wisdom of the basic rule disfavoring federal pre-emption
of state laws, and second, the specific concerns identified
in the legislative history as the basis for federal pre-
emption.  The most expansive statement of that purpose
was quoted in our opinion in Shaw.  As explained by
Congressman Dent, the -crowning achievement- of the
legislation was the -`reservation to Federal authority [of]
the sole power to regulate the field of employee benefit
plans.  With the preemption of the field, we round out the
protection afforded participants by eliminating the threat
of conflicting and inconsistent State and local regula-
tion.'-  Id., at 99 (quoting 120 Cong. Rec. 29197 (1974)).
  The statute at issue in this case does not regulate even
one inch of the pre-empted field, and poses no threat
whatsoever of conflicting and inconsistent state regulation.
By its holding today the Court enters uncharted territory.
Where that holding will ultimately lead, I do not venture
to predict.  I am persuaded, however, that the Court has
already taken a step that Congress neither intended nor
foresaw.
  Accordingly, I respectfully dissent.