The issue before the United States Supreme Court in this case was whether the preemption provision of the Employee Retirement Income Security Act (“ERISA”) barred a State from imposing reporting requirements on ERISA plans beyond what ERISA itself requires.
The case arose when Liberty Mutual instructed the third-party administrator of its ERISA plan in Vermont not to comply with a subpoena from the State requiring that certain health claims information be collected pursuant to Vermont law. Vermont, like a number of other States (including the other five in New England), has a statute that requires health care providers and health care payers in Vermont to provide claims data and related information to the State’s specialized health care database. The State says that it relies on the data collected to inform its health care policy decisions in a number of ways. As the basis for its refusal to comply with this Vermont law, Liberty Mutual argued, both in the suit it brought in the Vermont federal District court and, subsequently, in the Court of Appeals for the Second Circuit, that since ERISA requires certain forms of reporting by ERISA plans, any additional form of reporting imposed by State law is preempted under ERISA’s broad preemption provision.
Liberty Mutual lost on summary judgment in the district court, but obtained a ruling its favor from the Court of Appeals in a split 2-1 decision. On June 29, 2015, the Supreme Court granted certiorari to hear the matter on the merits, and NELF filed an amicus brief in support of Liberty Mutual.
In its brief, NELF addressed recent Supreme Court ERISA decisions in which the court adopts a “presumption against preemption,” and NELF argued that there exist several reasons for the Court to abandon or limit its use of that presumption. The presumption is usually traced back to Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947), where the Court adopted a working “assumption” that the “historic police powers of the States” should not be deemed to be superseded when “Congress legislate[s] . . . in [a] field which the States have traditionally occupied” unless such preemption was “the clear and manifest purpose of Congress.” As preemption has long been declared by the Court to be a matter of congressional intention, use of the presumption is especially inapt when one is dealing with an express preemption provision, as in ERISA. Such an express provision banishes the need for any kind of presumption because it clearly establishes the fact of Congress’s intention to preempt. From that point on, the actual language, purpose, and context of the statute provide much surer guidance to Congress’s intended meaning than could be given by any presumption unmoored to the statutory text.
Not surprisingly, therefore, while the presumption formulated in Rice may have been adopted by the Court in order to assist it in discerning Congress’s intention, there has been no shortage of scholars who, however much they may disagree among themselves on other legal points, agree that the Court has signally failed to employ the presumption in a consistent methodological fashion.
Moreover, use of the presumption in instances of express preemption is bedeviled by the problem of deciding how narrowly or expansively to define the relevant field of supposed traditional State regulation. Cf. Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 546-47 (1985) (“We therefore now reject, as unsound in principle and unworkable in practice, a rule of state immunity from federal regulation that turns on a judicial appraisal of whether a particular governmental function is ‘integral’ or ‘traditional.’”). The present case exemplified that problem, as the two sides contended over whether the field should be viewed broadly, with the emphasis falling on traditional State health and welfare concerns, or narrowly, with the focus on the novelty of the means by which data is to be collected under the Vermont law. This disagreement was mirrored in the differing views of the majority opinion and the dissent in the appeals court.
Finally, because the judicially fashioned presumption against preemption necessarily works to narrow interpretation, it gives the safeguards of federalism a kind of double weight, beyond the weighting given by Congress when it composed the text of the statute.
For these reasons, the “presumption against preemption” is an entirely inappropriate tool of statutory construction, and NELF urged the Court not to adopt it in this case when determining the scope of the express preemption provision found in ERISA.
On March 1, 2016, the Supreme Court issued its decision in this case. The Court agreed with NELF, 6-2, holding that ERISA preempts Vermont’s statute as applied to ERISA plans.