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Egelhoff v. Egelhoff - 532 U.S. 141, 121 S. Ct. 1322 (2001)

Rule:

A state law relates to an Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.S. §§ 1001 et seq., plan if it has a connection with or reference to such a plan. Acknowledging that "connection with" is scarcely more restrictive than "relate to," the United States Supreme Court cautions against an "uncritical literalism" that would make preemption turn on "infinite connections." Instead, to determine whether a state law has the forbidden connection, the court looks both to the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive, as well as to the nature of the effect of the state law on ERISA plans.

Facts:

While David A. Egelhoff was married to petitioner Donna Egelhoff, 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). Shortly after Donna and David divorced, David died intestate. Respondents, David's children from a previous marriage, filed separate suits against Donna in state court to recover the insurance proceeds and pension plan benefits. They relied on a Washington statute 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. Respondent children argued that in the absence of a qualified named beneficiary, the proceeds would pass to them as David's statutory heirs under state law. The trial courts concluded that both the insurance policy and the pension plan should be administered in accordance with ERISA, and granted petitioner Donna summary judgment in both cases. The Washington Court of Appeals consolidated the cases and reversed, concluding that the statute was not pre-empted by ERISA. The State Supreme Court affirmed, holding that the statute, although applicable to employee benefit plans, does not "refer to" or have a "connection with" an ERISA plan that would compel pre-emption under that statute. Donna filed a petition for certiorari review.

Issue:

Did the Washington State Supreme Court err in holding that the statute, although applicable to employee benefit plans, does not "refer to" or have a "connection with" an ERISA plan that would compel pre-emption under that statute?

Answer:

Yes

Conclusion:

The United States Supreme Court determined that ERISA expressly pre-empted the statute to the extent it applied to ERISA plans because the statute directly conflicted with ERISA's requirements that plans be administered, and benefits be paid, in accordance with plan documents. In addition, the state statute interfered with nationally uniform plan administration, one of the principal goals of ERISA.

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