Argument of Speaker
Mr. Speaker: The opinion of the Court in No. 99-1529, Egelhoff against Egelhoff will be announced by Justice Thomas.
Argument of Justice Thomas
Mr. 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.
