RESPONDENT: Liberty Mutual Insurance Company
LOCATION: U.S. District Court for the District of Vermont
DOCKET NO.: 14-181
DECIDED BY: Roberts Court (2016- )
LOWER COURT: United States Court of Appeals for the Second Circuit
CITATION: 577 US (2016)
GRANTED: Jun 29, 2015
ARGUED: Dec 02, 2015
DECIDED: Mar 01, 2016
Bridget C. Asay - for the petitioner
John F. Bash - Assistant to the Solicitor General, for the United States as amicus curiae, for the petitioner
Seth P. Waxman - for the respondent
Facts of the case
Liberty Mutual Insurance Company (Liberty Mutual) operates a self-insured employee health plan through a third-party administrator. Vermont state law requires that all health plans, including self-insured plans, file reports containing claims data and other information with the state. The statute specifies what type of information is required and how it is transmitted. When Vermont subpoenaed claims data from the third-party administrator, Liberty Mutual sued the state and argued that the reporting requirements of the Employment Retirement Income Security Act of 1974 (ERISA) preempted the Vermont statute. The district court found in favor of the state and held that ERISA did not preempt the Vermont statute. The U.S. Court of Appeals for the Second Circuit reversed and held that ERISA preempted the state statute because the state statute’s requirements were connected to the ERISA requirements and therefore were preempted.
Do the reporting requirements of the Employee Retirement Income Security Act of 1974 preempt a Vermont state statute regarding reporting requirements as applied to a self-insured employee health plan?
Media for Gobeille v. Liberty Mutual Insurance Co.Audio Transcription for Oral Argument - December 02, 2015 in Gobeille v. Liberty Mutual Insurance Co.
Audio Transcription for Opinion Announcement - March 01, 2016 in Gobeille v. Liberty Mutual Insurance Co.
John G. Roberts, Jr.:
Justice Kennedy has our opinion this morning in case 14-181 Gobeille versus Liberty Mutual Insurance Company.
Anthony M. Kennedy:
The state of Vermont requires certain public and private entities that provide and pay for healthcare services to report extensive data to a Vermont State Agency and the data relates to health insurance claims and enrollment.
The reported information has compiled into what is termed an “all-payer claims database.”
Failure to comply can lead to civil penalties.
Almost 20 states have or are implementing similar databases.
Respondent Liberty Mutual Insurance Company has a health plan for its own present and former employees and their families.
Liberty plan provides benefits in all 50 states and to over 80,000 persons.
Liberty's plan is regulated by the Employee Retirement Income Security Act of 1974 commonly referred to as ERISA.
Liberty does not manage the plan itself.
It is contracted for administrative services with Blue Cross and Blue Shield of Massachusetts and that brings us to the Vermont reporting law at issue here.
In 2011, Vermont issued a subpoena to Blue Cross.
It demanded the Blue Cross provide data relating to plan members who are from Vermont.
Liberty instructed Blue Cross not to comply and it filed this suit.
Liberty sought an injunction and a declaration that Vermont's reporting requirements are preempted by ERISA.
The District Court granted summary judgment to Vermont, the Court of Appeals for the Second Circuit reversed and this Court granted certiorari to address the issue of ERISA preemption.
ERISA's express preemption clause is terse but comprehensive.
In an earlier case, this Court has defined standards for interpreting and applying that clause.
As relevant here, ERISA preempts the state laws that govern a central matter of plan administration or interfere with nationally uniform plan administration.
ERISA does not guarantee substantive benefits.
Instead that federal statute seeks to make the benefits promised by an employer more secure by mandating certain oversight systems and other standard procedures.
Those systems and procedures are intended to be uniform.
ERISA contains extensive reporting disclosure and record keeping requirements.
These requirements are central to and an essential part of ERISA uniform plan administration system.
Today the Court concludes that Vermont's regime as applied to ERISA plans is preempted.
The state attempts to govern plan reporting, disclosure and by necessary implication record keeping.
These matters are fundamental components of ERISA's regulation of plan administration.
Differing or even parallel regulations from multiple jurisdictions could create wasteful administrative costs and subject plans to various and expensive liabilities in the various states.
The Secretary of Labor, not the states, is authorized to administer the reporting requirements of plans governed by ERISA.
Vermont's counter arguments are unpersuasive.
Vermont argues that Liberty has not shown that the state's scheme has caused it to suffer economic costs but Liberty does not need to wait to bring its preemption action until confronted with numerous inconsistent obligations or encumbered with any ensuing costs.