LOCATION: Los Angeles City Hall
DOCKET NO.: 99-1529
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: Washington Supreme Court
CITATION: 532 US 141 (2001)
ARGUED: Nov 08, 2000
DECIDED: Mar 21, 2001
Barbara B. McDowell - Argued the cause for the United States, as amicus curiae, by special leave of court, supporting the petitioner
Thomas C. Goldstein - Argued the cause for the respondents
William J. Kilberg - Argued the cause for the petitioner
Facts of the case
David A. Egelhoff designated his wife, Donna Rae Egelhoff, as the beneficiary of a life insurance policy and a pension plan provided by his employer and governed by the Employee Retirement Income Security Act of 1974 (ERISA). Two months after the Egelhoffs divorced, Mr. Egelhoff died. His children then sued Donna Rae to recover the insurance proceeds and the pension plan benefits. The children relied on a Washington state statue that provides that the designation of a spouse as the beneficiary of a nonprobate asset - defined to include a life insurance policy or employee benefit plan - is revoked automatically upon divorce. Subsequently, the proceeds would pass to the children as Mr. Egelhoff's statutory heirs under state law. Under ERISA, the state trial courts granted Donna Rae summary judgment. In reversing, the Washington Court of Appeals found that the statute was not pre-empted by ERISA. In affirming, the Washington Supreme Court held that the statute does not "refer to" ERISA plans to an extent that would require pre-emption.
Does the Employee Retirement Income Security Act of 1974 pre-empt a Washington statute provides that the designation of a spouse as the beneficiary of a nonprobate asset is revoked automatically upon divorce?
Media for Egelhoff v. EgelhoffAudio Transcription for Oral Argument - November 08, 2000 in Egelhoff v. Egelhoff
Audio Transcription for Opinion Announcement - March 21, 2001 in Egelhoff v. Egelhoff
The opinion of the Court in No. 99-1529, Egelhoff against Egelhoff will be announced by Justice Thomas.
This case comes to us on a writ of certiorari to the Supreme Court of Washington.
While David Egelhoff was married to petitioner, he designated her as the beneficiary of a life insurance policy and pension plan provided by his employer and governed by the Employee Retirement Income Security Act of 1974 (ERISA).
Soon after petitioner and Mr. Egelhoff divorced, Mr. Egelhoff died intestate.
Respondents Mr. Egelhoff’s children by previous marriage, sued petitioner in State Court to recover the insurance and pension benefits, they’ve relied on a Washington statute providing that the designation of a spouse as the beneficiary of a nonprobate asset, and here such as a life insurance policy or pension policy is revoked automatically upon divorce.
Respondents argued that in the absence of a qualified name beneficiary the proceeds would pass to them as Mr. Egelhoff heirs.
The Trial Courts concluded that the plans should be interpreted in accordance with ERISA, and granted summary judgment to petitioner.
The Washington Court of Appeals reversed holding that the statute was not preempted by ERISA.
The Washington Supreme Court affirmed.
In an opinion filed with the Clerk today, we reverse.
ERISA’s preemption section states that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan”.
A state law relates to an ERISA plan we have said, “If it has a connection with or reference to such a plan”.
The statute at issue here has an impermissible connection with ERISA plans because it binds administrators to a particular choice of rules for determining beneficiary status.
Administrators must pay benefits to the beneficiaries chosen by the state law, rather than to those identified in plan documents.
This implicates an area of core ERISA concern contradicting ERISA’s commands that the plan shall “specify the bases on which payments are made,” and that the fiduciary shall administer the plan “in accordance with the documents and instruments governing the plan.”
The statue also has a prohibited connection with ERISA plans because it interferes with nationally uniform plan administration.
Administrators cannot make payments simply by identifying the beneficiary specified in the plan documents.
Instead they must familiarize themselves with state statutes determine whether the named beneficiary status has been “revoked”.
Differing state regulations affecting an ERISA plan system for processing claims and paying benefits impose precisely the burden ERISA preemption was intended to avoid.
Justice Scalia has filed a concurring opinion in which Justice Ginsburg has joined; Justice Breyer has filed a dissenting opinion in which Justice Stevens has joined.