LOCATION: Elstad's Residence
DOCKET NO.: 84-325
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: Massachusetts Supreme Judicial Court
CITATION: 471 US 724 (1985)
ARGUED: Feb 26, 1985
DECIDED: Jun 03, 1985
Addison Lane McGovern - on behalf of the Appellant
Jay Greenfield - on behalf of the Appellant
Sally A. Kelly - on behalf of the Appellees
Facts of the case
Media for Metropolitan Life Insurance Company v. Massachusetts
Audio Transcription for Oral Argument - February 26, 1985 in Metropolitan Life Insurance Company v. Massachusetts
Warren E. Burger:
We will hear arguments next in Metropolitan Life Insurance Company against Massachusetts and the companion case.
Mr. Greenfield, you may begin whenever you are ready.
Mr. Chief Justice, and may it please the Court:
This case is here on appeal from the Supreme Judicial Court of Massachusetts.
It concerns the validity of a state law which we have been calling Section 47B.
The question is whether that state law is preempted by either of two federal statutes, ERISA or the NLRA.
I will address the ERISA issue and my colleague, Mr. McGovern, will address the NLRA issue.
We have between ourselves allocated 20 minutes to the ERISA argument and I hope to save some of that time for rebuttal.
We are concerned with Section 47B to the extent that it relates to welfare plans governed by ERISA.
By its express terms, that statute directly regulates and relates to employee welfare plans.
The statute provides, and I quote,
"That any employee's health and welfare fund which provides hospital expense and surgical expense benefits and which covers Massachusetts residents shall provide certain specified benefits for mental or nervous conditions. "
Now, the statute also regulates and relates to ERISA plans in another respect.
It provides that any policy of insurance issued to an ERISA plan shall furnish the same detailed benefits.
So, there are two relevant parts to the statute, the part that requires the plan to provide the specified benefits, that is direct regulation, and the part that requires policies purchased by those plans to provide the same benefits.
If the plan is insured, the plan must provide those benefits.
That is... for lack of a better term... but accurately indirect regulation.
There is no question concerning the purpose of this statute.
It is clear from the very extensive report of a legislative committee that the purpose is to change the manner in which mental health care is funded and provided in Massachusetts.
The Commonwealth not only concedes this, the Commonwealth positively asserts it.
There brief says for one example that the purpose of the statute is, and I quote,
"The Massachusetts State Legislature adopted Section 47B to address the problems of treating mental illness. "
Another place in the brief:
"Section 47B implements a broad policy with respect to treatment of mental illness. "
So, the purpose of this statute is not to prevent unfair trade practices by the insurer and it is not to guarantee that the insurance company is going to be solvent when a claim is filed.
The purpose, I submit, is not to regulate insurance.
Insurance comes into the picture only as a means, a vehicle, for shifting costs and expanding services.
There is no question that this statute is preempted by ERISA to the extent it seeks to regulate plans directly.
That was conceded by the Commonwealth before a lessee insurer and those foreclose any fair dispute on the subject.
Nor can there be any serious question concerning the impact of 47B as it is construed by the state and by the majority of the court below.