MacKey v. Lanier Collection Agency & Service, Inc.

Justice Kennedy,

mth whom Justice Blackmun, Justice O’Connor, and Justice Scalia join, dissenting.

When it enacted ERISA in 1974, Congress expressly preempted “any and all state laws insofar as they may now or hereafter relate td any employee benefit plan,” and broadly defined “state law” to include “all laws, decisions, rules, regulations, or other State action having the effect of law.” ERISA § 514(a), 29 U. S. C. § 1144 (a). The Court holds that these provisions pre-empt a Georgia statute, Ga. Code Ann. § 18-4-22.1 (1982), specifically exempting ERISA plans from the State’s garnishment laws. With this much I agree. The Court also holds, however* that § 514(a), ERISA’s preemption provision, does not prohibit the garnishment of funds due to participants in ERISA welfare benefit plans. I believe that this latter conclusion is inconsistent with both the statute and our precedents and, with all respect, I dissent.

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We have said with repeated emphasis that the reach of § 514(a) is not limited to state laws specifically designed to affect employee benefit plans. See Pilot Life Ins. Co. v. Dedeaux, 481 U. S. 41, 45-46 (1987); Shaw v. Delta Airlines, Inc., 463 U. S. 85, 98 (1983). Further, the reach of § 514(a) is not limited to state laws that conflict with the substantive provisions of ERISA. See Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724, 739 (1985). On the contrary, *842 the phrase “relate to” must be ‘“given its broad commonsense meaning, such that a state law “relate[s] to” a benefit plan “in the normal sense of the phrase, if it has a connection with or reference to such a plan.”’” Pilot Life Insurance Co. v. Dedeaux, supra, at 47 , quoting Metropolitan Life, supra, at 739, in turn quoting Shaw, supra, at 99 . In my view, state garnishment laws necessarily relate to employee benefit plans to the extent they require such plans to act as garnishees, which is a substantial and onerous obligation.

Compliance with the state garnishment procedures subjects the plan to significant administrative burdens and costs. Petitioners are required to confirm the identity of each of the 23 plan participants who owe money to respondent, calculate the participant’s maximum entitlement from the fund for the period between the service date and the reply date of the summons of garnishment, determine the amount that each participant owes to respondent, and make payments into state court of the lesser of the amount owed to respondent and the participant’s entitlement. Petitioners must also make decisions concerning the validity and priority of garnishments and, if necessary, bear the costs of litigating these issues. Further, as trustees of a multiemployer plan covering participants in several States, petitioners are potentially subject to multiple garnishment orders under varying or conflicting state laws. It is apparent that these effects of garnishment laws on employee benefit plans are not tenuous, remote, or peripheral, and that such laws are accordingly pre-empted. See Shaw v. Delta Airlines, Inc., supra, at 100, n. 21.

This common-sense reading of the language of § 514(a) is confirmed by Congress’ decision to exempt certain “domestic relations orders” from the pre-emptive reach of ERISA. See 29 U. S. C. § 1144 (b)(7) (1982 ed., Supp. IV). As the majority acknowledges, this provision was intended to save from pre-emption certain garnishments designed to enforce domestic relations obligations. See ante, at 838. The ma *843 jority disregards, however, the strong structural implication created by the limited scope of this exception. Surely Congress knew that similar questions concerning the validity of garnishment procedures would arise in other contexts. Indeed, the majority recognizes as much. See ante, at 840, citing H. R. Rep. No. 98-655, pt. 1, p. 42 (1984). Yet Congress decided to save from pre-emption only a limited class of garnishment orders, and then only upon specifically prescribed conditions. See 29 U. S. C. § 1056 (d)(3)(B)(i) (1982 ed., Supp. IV) (defining “qualified domestic relations order”). The majority’s conclusion that ERISA does not bar garnishment of welfare plan benefits renders nugatory this carefully calibrated legislative choice.

It is no answer to say, as the majority does, that the “ ‘views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one.’” Ante, at 840, quoting United States v. Price, 361 U. S. 304, 313 (1960). For the views that the majority rejects are not the postenactment musings of a Member of Congress or congressional committee, but a positive expression of legislative will to which we are bound to give effect. In enacting § 514(b)(7) Congress dispelled any possible doubt concerning the circumstances under which welfare benefit plans are required to comply with state orders providing for the garnishment of plan benefits. The Court, which not infrequently calls upon Congress to manifest its intent more clearly, today disregards a clear answer given by Congress in a valid enactment.

II

In reaching its conclusion that Georgia’s garnishment statutes are not pre-empted in the circumstances of this case, the Court relies on two principal arguments. First, the Court notes that Congress contemplated that ERISA benefit plans would be subject to suit under certain circumstances. The majority notes, correctly, that civil enforcement actions are maintainable pursuant to 29 U. S. C. § 1132 . The majority *844 points further to certain suits that may be brought “against ERISA plans for run-of-the-mill state-law claims...Ante, at 833. The Court reasons that, as ERISA does not provide an enforcement mechanism for collecting judgments won in such suits, Congress must have intended that state-law methods of collection remain undisturbed.

This argument has no relevance to the issue before us. The question we face is not whether garnishment may be used to enforce a valid judgment obtained against an ERISA plan. When garnishment is so used, its process issues against some third party who owes the plan a debt or who has property in his possession in which the plan has an interest. The significant burdens of complying with the garnishment order fall on the plan’s debtor, not on the plan. The issue we face in this case is quite different: it is whether an ERISA benefit plan may be forced to act as a garnishee by creditors of the plan’s participants and beneficiaries. Because the Court fails to analyze the different contexts in which state garnishment laws may affect ERISA plans, its conclusion that such laws are never pre-empted is far too broad. And while the Court’s conclusion may be valid in garnishment proceedings where an ERISA plan is the debtor, it is plainly unwarranted in situations where, as here, the plan is a garnishee. For it is in the latter situation that plans face the repetitious and costly burden of monitoring controversies involving hundreds of beneficiaries and participants in various States.

Further, it assumes the point in issue to say that the Court’s conclusion is required by cases holding that a “sue- and-be-sued” clause creates a presumption of susceptibility to garnishment and other state-law procedures for enforcing judgments. See ante, at 834, n. 9, citing Franchise Tax Board of California v. USPS, 467 U. S. 512 (1984), and FHA v. Burr, 309 U. S. 242 (1940). The “sue-and-be-sued” clause in each of those cases was a waiver of the sovereign immunity that otherwise would have protected certain federal agencies from legal process, including writs of garnishment. In that *845 context, it was perfectly sensible to “presum[e] that when Congress launched a governmental agency into the commercial world and endowed it with authority to ‘sue or be sued,’ that agency is no less amenable to judicial process than a private enterprise under like circumstances would be.” FHA v. Burr, supra, at 245 . In the ERISA context, by contrast, § 514(a) substantively limits the States’ ability to treat employee benefit plans as they may treat any commercial enterprise. Our cases finding several state-law causes of action pre-empted establish at least this much. See, e. g., Pilot Life, 481 U. S., at 47-48 (holding that certain contract and tort laws, though otherwise generally applicable, may not be invoked against an employee benefit plan); Shaw, 463 U. S., at 103-106 (finding certain fair employment laws pre-empted).

The second argument on which the Court relies is that the conclusion that § 514(a) pre-empts the state statutes at issue in this case would render redundant the bar against alienation or assignment of pension benefits set forth in ERISA § 206(d)(1), 29 U. S. C. § 1056 (d)(1). See ante, at 837. This provision prohibits any assignment, whether voluntary or involuntary, of pension plan assets. Under the view the Court rejects, § 514(a) would prohibit involuntary assignments of pension and welfare plan assets because such assignments necessarily would be effected by application of state laws, like the Georgia laws at issue in this case, that are preempted. I agree with the Court that ordinarily the partial redundancy of a statutory command, such as would result from the interpretation of § 514(a) that the Court rejects, is not lightly to be inferred. Nevertheless, I believe there are two reasons why this consideration is not weighty in the present context.

First, the alternative construction adopted by the Court results in the total redundancy of § 514(b)(7), 29 U. S. C. § 1144 (b)(7) (1982 ed., Supp. IV). It is preferable, in my view, to tolerate the partial overlap rejected by the Court than to construe § 514(a) so as to render another section of the *846 statute surplus in its entirety. Second, the deliberate, expansive reach of § 514(a) necessarily encompasses many state laws that would be pre-empted even in the absence of its broad mandate, solely on the basis of their conflict with ERISA’s substantive requirements. Some degree of overlap is a necessary concomitant of the approach to pre-emption chosen by Congress. The partial redundancy which the Court strives to avoid is essentially analogous to a host of like overlaps that Congress must have foreseen. To suggest that this type of overlap is sufficient to call into question the applicability of § 514(a) is to defeat the very purpose for which it was enacted. I cannot agree with the Court’s conclusion that petitioners must comply with the garnishment orders at issue in this case.