Amicus Curiae Brief — The ERISA Industry Committee, Petitioner v. City of Seattle, Washington

No. 21-1019

In the

Supreme Court of the United States

THE ERISA INDUSTRY COMMITTEE,

Petitioner,

v.

CITY OF SEATTLE, WASHINGTON,

Respondent.

On Petition for a Writ of Certiorari to the United

States Court of A ppeals for the Ninth Circuit

BRIEF OF AMICI CURIAE THE AMERICAN

BENEFITS COUNCIL, BUSINESS GROUP ON

HEALTH, THE HR POLICY ASSOCIATION,

THE NATIONAL ALLIANCE OF HEALTHCARE

PURCHASER COALITIONS, THE SOCIETY

FOR HUMAN RESOURCE MANAGEMENT, THE

ALABAMA EMPLOYER HEALTH CONSORTIUM,

THE HEALTHCARE PURCHASER ALLIANCE OF

MAINE AND THE SILICON VALLEY EMPLOYERS

FORUM IN SUPPORT OF PETITIONER

Mark C. Nielsen

Counsel of Record

Seth T. Perretta

Ryan C. Temme

Matthew W. Lanahan

Groom Law Group, Chartered

1701 Pennsylvania Avenue, N.W., Suite 1200

Washington, D.C. 20006

(202) 867-0620

mnielsen@groom.com

Counsel for Amici Curiae

310978

i

TABLE OF CONTENTS

Page

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . i

TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . . ii

INTEREST OF AMICI CURIAE . . . . . . . . . . . . . . . . . . 1

SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . . . 5

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

I.

Ci rcuit Split Ex ists on a Matter of

National Importance . . . . . . . . . . . . . . . . . . . . . . . 7

II. ERISA Preemption Is Fundamental to

Employers Offering Health Coverage to

Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

III. Golden Gate and its Progeny Render ERISA

Preemption Meaningless and Are Likely to

Result in Increased Health Coverage Costs

and Fewer Health Coverage Options . . . . . . . . . 14

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

ii

TABLE OF CITED AUTHORITIES

Page

Cases

Aloha Airlines, Inc. v. Ahue,

12 F.3d 1498 (9th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . 9

Boggs v. Boggs,

520 U.S. 833 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Conkright v. Frommert,

559 U.S. 506 (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Curtiss-Wright Corp. v. Schoonejongen,

514 U.S. 73 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Egelhoff v. Egelhoff,

532 U.S. 141 (2001) . . . . . . . . . . . . . . . . . . . 9, 11, 15, 21

Fort Halifax Packing Co. v. Coyne,

482 U.S. 1 (1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Gobeille v. Liberty Mut. Ins. Co.,

577 U.S. 312 (2016) . . . . . . . . . . . . . . . . . . . . . . . . . 9, 21

Golden Gate Rest. Ass’n v. City & County of S.F.,

546 F.3d 639 (9th Cir. 2008) . . . . . . . . . . . . . . . . passim

Golden Gate Rest. Ass’n v. City & Cnty. of S.F.,

558 F.3d 1000 (9th Cir. 2009) . . . . . . . . . . . . . . 8, 10, 12

iii

Cited Authorities

Page

Ingersoll-Rand Co. v. McClendon,

498 U.S. 133 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Merit Constr. All. v. City of Quincy,

759 F.3d 122 (1st Cir. 2014) . . . . . . . . . . . . . . . . . . . . 8, 9

N.Y. State Conf. of Blue Cross & Blue Shield

Plans. v. Travelers Ins. Co.,

514 U.S. 645 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Retail Industry Leaders Ass’n v. Fielder,

475 F.3d 180 (4th Cir. 2007) . . . . . . . . . . . . . . . . . . . 8, 9

Rush Prudential HMO, Inc. v. Moran,

536 U.S. 355 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Rutledge v. Pharm. Care Mgmt. Ass’n,

141 S. Ct. 474 (2020) . . . . . . . . . . . . . . . . . . . . . . . . 9, 21

The ERISA Indus. Comm. v. City of Seattle,

No. 20-35472, 2020 WL 6682044 (9th Cir. 2020) . . . 20

Statutes

City of East Orange, N.J., Code §§ 140-1–15 . . . . . . . . 18

City of Jersey City, N.J., §§4-1–10 . . . . . . . . . . . . . . . . . 18

City of Newark, N.J., Code §§16:18-1–15 . . . . . . . . . . . . 18

City of Passaic, N.J., Code §§ 128-1–14 . . . . . . . . . . . . . 18

iv

Cited Authorities

Page

City of Patterson, N.J., Code §§ 412-1–13 . . . . . . . . . . . 18

City of Trenton, N.J., Code §§ 230-1–13 . . . . . . . . . . . . 18

Conn. Gen. Stat. Ann. §§ 31-57r–57x (West) . . . . . . . . . 18

N.J. Stat. Ann. §§ 34:11d-1 . . . . . . . . . . . . . . . . . . . . . . . 18

N.Y.C., N.Y., Code §§ 20-911–924 . . . . . . . . . . . . . . . . . . 18

N.Y. Lab. Law § 196-b (McKinney 2020) . . . . . . . . . . . . 18

Oakland, Cal., Mun. Code ch. 5.93 . . . . . . . . . . . . . . . . . 21

S.F., Cal., Admin. Code ch. 14, S.F. Health Care

Security Ordinance . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Seattle, Wash., Mun. Code ch. 14.28 (2019) . . . . . passim

Twp. of Irvington, N.J., Code §§ 277-1–14 . . . . . . . . . . 18

Twp. of Bloomfield, N.J., Code §§ 160-1–16 . . . . . . . . . . 18

Twp. of Montclair, N.J., Code §§ 132-1–14 . . . . . . . . . . 18

Westchester Cnty., N.Y., Code §§ 585.01–16 . . . . . . . . . 18

Other Authorities

120 Cong. Rec. 29197 (1974) (statement of Rep. Dent) . . . 10

v

Cited Authorities

Page

H.R. Conf. Rep. 93-1280, 1974 U.S.C.C.A.N. 5038 . . . . 10

Business Group on Health, 2020 Large Employers’

Leave Strategy and Transformation Survey, (Jan.

31, 2020), https://www.businessgrouphealth.org/

resou rces / 2 0 2 0 -la rge - employers -leave strategy-and-transformation-survey. . . . . . . . . . . . . 17

Deborah Pike Olsen, Private Insurers Expand

Telehealth Coverage, Which plans pay what

— and how new state rules factor in, AARP

(Aug. 31, 2020), https://www.aarp.org/health/

conditions-treatments/info-2020/telehealthprivate-insurance-coverage.html . . . . . . . . . . . . . . . 12

Devin M. Mann et al, COVID-19 transforms

health care through telemedicine: Evidence

from the field (2020), https://pubmed.ncbi.

nlm.nih.gov/32324855/#affiliation-1 . . . . . . . . . . . . . 12

Health Economics Practice, Barents Group, LLC,

Impacts of Four Legislative Provisions on

Managed Care Consumers: 1999-2003 (1998) . . . . . 15

Katherine Keisler-Starkey & Lisa N. Bunch,

Health Insurance Coverage in the United

States: 2020, U.S. Census Bureau, 4 (Sept. 2021),

https://www.census.gov/content/dam/Census/

library/publications/2021/demo/p60-274.pdf. . . . . . . 13

1

INTEREST OF AMICI CURIAE1

The American Benefits Council (the “Council”) is

dedicated to protecting employer-sponsored benefit

plans. The Council represents more major employers—

over 220 of the world’s largest corporations—than

any other association that exclusively advocates on

the full range of employee benefit issues. Members

also include organizations supporting employers of all

sizes. Collectively, Council members directly sponsor or

support health and retirement plans covering virtually

all Americans participating in employer-sponsored

programs.

Business Group on Health (the “Business Group”)

is the leading non-profit organization representing

large employers’ perspectives on optimizing workforce

strategy through innovative health, benefits and wellbeing solutions and on health policy issues. The Business

Group keeps its membership informed of leading-edge

thinking and action on health care cost and delivery,

financing, affordability and experience with the health

care system. The Business Group’s over 440 members

include 74 Fortune 100 companies as well as large public

sector employers, who collectively provide health and

well-being programs for more than 60 million individuals

in 200 countries.

1. No counsel for a party authored this brief in whole or in

part, and no such counsel or party made a monetary contribution

intended to fund the preparation or submission of this brief. No

person other than amici, their members, or their counsel made a

monetary contribution to its preparation or submission. The parties

were provided the required notice and have consented to the filing

of this brief.

2

The HR Policy Association (“HRPA”) is the leading

organization representing chief human resource officers

of over 400 of the largest employers in the United States.

Collectively, their companies provide health care coverage

to over 21 million employees and dependents in the United

States and spend more than $110 billion annually on health

care benefits and related taxes.

The National Alliance of Healthcare Purchaser

Coalitions (“National Alliance”) is the only nonprofit,

purchaser-led organization with a national and regional

structure dedicated to driving health and healthcare value

across the country. Its members represent private and

public sector, nonprofit and Taft-Hartley organizations,

and more than 45 million Americans, spending over $300

billion annually on healthcare.

As the voice of all things work, workers and the

workplace, the Society for Human Resource Management

(“SHRM”) is the foremost expert, convener and thought

leader on issues impacting today’s evolving workplaces.

With more than 300,000 human resources and business

executive members in 165 countries, SHRM impacts

the lives of more than 115 million workers and families

globally. SHRM members design and administer benefits,

including health care, in their respective organizations.

The Alabama Employer Health Consortium (the

“AEHC”) is an employer-led non-profit organization

dedicated to improving the provision of healthcare benefits

from the employer’s perspective. The AEHC provides

important resources to private and public member

employers to optimize value of their healthcare spending

and to promote quality and value for the benefit of member

companies and their employees in the State of Alabama.

3

The Healthcare Purchaser Alliance of Maine is a nonprofit organization whose over 50 members include public

and private employers, benefit trusts, hospitals, health

plans, doctors and consumer groups working together

to improve health and maximize the value of health care

services in the State of Maine.

The Silicon Valley Employers Forum (“SVEF”)

comprises over 55 high-tech employers, representing

over 2 million employees and dependents. SVEF impacts

and influences the evolution of global benefits where

member companies benchmark and share best practices

to optimize, manage and create leading-edge programs

in the areas of health care, retirement, and other benefits.

This is a case of great significance for amici and

their members, who are at the forefront of the employersponsored health coverage system and who offer many

millions of workers employee benefit plans subject to

the Employee Retirement Income Security Act of 1974,

as amended (“ERISA”), including comprehensive health

coverage. As most specific to this case, the Seattle

ordinance at issue, Seattle Municipal Code chapter 14.28

(2019) (the “Seattle Ordinance”), will directly impact

a substantial number of amici members. The complex

compliance scheme required by the Seattle Ordinance,

upheld by the Ninth Circuit, increases the overall

employer burden of administration and costs that are

borne by employers and, typically, shared in part by

employees.

More generally, amici’s interests and those of their

members are significantly amplified because of the

importance of the regulatory uniformity provided by

4

ERISA’s sweeping preemption provision. This regulatory

uniformity ensures that all employers, whether local,

multi-state, or national, offering their employees ERISAcovered benefits can do so efficiently without being subject

to a host of state and local requirements. Because of “the

centrality of pension and welfare plans in the national

economy, and their importance to the financial security

of the Nation’s work force,” Boggs v. Boggs, 520 U.S. 833,

839 (1997), the protection of uniform plan administration

is essential to the interests of employers and employees

alike. Moreover, ERISA preemption helps ensure that

employers can fairly and equitably extend health coverage

and other employee benefits to workers without regard to

their place of residence or employment, which has become

all the more essential as the pandemic has created new

norms with respect to where employees carry out their

work.

The Seattle Ordinance and other similar state and

local “play-or-pay” laws (i.e., laws in which employers

must provide a certain level of benefits or pay a penalty,

as described by Petitioner) directly undermine the

regulatory uniformity provided by ERISA preemption

by dictating the content and benefits under ERISA plans.

Amici and their members are gravely concerned about the

consequences if state and local governments are permitted

to impose play-or-pay laws, and circumvent ERISA’s clear

and broad preemption provision, by simply adding that, as

an alternative mode of compliance employers may make

a payment of the same amount directly to employees or

the government (described by Petitioner as an “or-pay

option”).

5

SUMMARY OF ARGUMENT

Congress created ERISA not only to establish

important procedural protections for participants and

beneficiaries with respect to certain employer-sponsored

benefits plans, but also to create a uniform regulatory

structure that would promote the offering of these benefit

plans in the first place. When enacting ERISA, Congress

recognized that many employers operate in more than

one state or locality. Thus, Congress understood that,

to encourage the sponsorship and maintenance of these

programs, the governing regulatory framework must

ensure that employers are able to look to a single set of

federal laws. If, instead, employers are confronted with

myriad state and local laws, they may decide they are

unable to bear the cost or burden required to offer such

voluntary benefits to their employees.

This case presents the question of whether ERISA’s

preemption provision permits state and local governments

to mandate that private employers choose to either

provide coverage of a certain value through the employer’s

ERISA-governed plan or make required payments to

certain employees for the specified purpose of providing

health coverage. As Petitioner fully explains, and as is

clear from both Congressional intent in drafting ERISA

and the forty-some years of Supreme Court precedent

that followed, the answer is a resounding “No.”

Nevertheless, in this case the Ninth Circuit, relying

on Golden Gate Restaurant Association v. City & County

of San Francisco, 546 F.3d 639 (9th Cir. 2008) (“Golden

Gate”), further entrenched a circuit split that creates a

practical morass for private employers who wish to provide

their employees with uniform health and other benefits

6

covered by ERISA. In failing to distinguish the unique

and prescriptive nature of the Seattle Ordinance, and

ignoring significant jurisprudential developments with

respect to the scope of ERISA preemption since it ruled

in Golden Gate, the Ninth Circuit has opened the door to

significant burdens on the employer-sponsored healthcare

system, and all ERISA-covered benefit plans as well. As

can be seen from the stated intentions of other localities

in the Ninth Circuit and elsewhere, these types of local

laws present the kind of inconsistency in regulation that

Congress clearly intended to prohibit in enacting ERISA.

The potential disruptive effects of multiple states and

localities adopting similar, but inconsistent, requirements

with respect to ERISA-covered plans undermines

uniformity and imposes the kind of administrative

burden on ERISA-covered plans that Congress expressly

sought to avoid—a burden that could result in a myriad

of adverse consequences for employees and employers

alike, including: the need for employers to track and

comply with a complex patchwork of benefit-related

laws across multiple jurisdictions and the associated

increased costs for plans and participants; the need

for employers to offer different benefits to different

employees based on geography despite the employees

being otherwise similarly situated; employee confusion

regarding the benefits available to them by their employer;

and ultimately, a potential reduction in the generosity of

benefits for many employees or even the complete loss of

benefits. Such outcomes clearly defy Congressional intent

in adopting ERISA’s broad preemption provision, and

necessitate this Court’s intervention so as to preserve

the nationally uniform plan administration necessary for

employers to continue offering the generous and effective

benefits they offer today.

7

As relevant here, the Seattle Ordinance requires

certain hotel industry employers to modify the terms of

existing ERISA-covered plans or else make a payment to

non-covered employees. See Seattle, Wash., Mun. Code ch.

14.28.060 (2019). While the terms of the Seattle Ordinance

are cabined to a specific industry, the repercussions of the

Court permitting a single locality to exercise this type of

power over ERISA-covered plans reach much further,

provide a roadmap for other localities to undermine

Congressional intent, and impose significant risks to the

core pillar of health coverage in this country, employersponsored health care. Because ERISA and forty years of

case law clearly prioritize uniformity and prohibit actions

of the type the City of Seattle took in this case and because

of the potentially harmful results should the Ninth Circuit

decision stand for both employers and employees, the

Court should consider the present case and overturn the

Ninth Circuit’s decision below.

ARGUMENT

I.

Circuit Split Exists on a Matter of National

Importance

As Petitioner has ably described, the Golden Gate

decision is an outlier among the Circuits with respect to

whether ERISA preempts state and local laws mandating

that employers either pay a specified sum or provide a

specific coverage. This outlier status derives largely from

the failure of the Ninth Circuit to apply the Supreme

Court’s prior precedents in the decision below, as well

as the inconsistency of Golden Gate with the Supreme

Court’s more recent rulings. As explained below, those

dictates from the Supreme Court have led both the First

and Fourth Circuits to determine that laws similar to the

8

Seattle Ordinance are preempted by ERISA. Allowing the

break with other circuits to continue risks a regulatory

morass of local laws, unnecessary legal costs, the need

for prohibitively expensive compliance programs, and the

reduction of benefits or increased costs passed along to

participants.

The Golden Gate decision, which is the foundation

of the decision in this matter, created a circuit split with

the Fourth Circuit’s decision in Retail Industry Leaders

Association v. Fielder, 475 F.3d 180 (4th Cir. 2007)

(“Fielder”), which predated Golden Gate and concerned

a Maryland law requiring certain employers to spend a

specific portion of their payroll costs on health care or

surrender the difference between the actual spend and

the required amount to the state. Golden Gate Rest. Ass’n

v. City & Cnty. of S.F., 558 F.3d 1000, 1004 (9th Cir. 2009)

(Smith, J., dissenting) (recognizing a circuit split with the

Fourth Circuit) (“Golden Gate II”). The Fourth Circuit

held that the Maryland law was preempted because it

created a situation where the only rational course of

action was to increase spending on health care to avoid

the tax and because it offended uniform nationwide plan

administration by requiring employers to monitor local

health care spending. Fielder, 475 F.3d at 193, 196–97.

Moreover, following the decision in Golden Gate,

the First Circuit deepened the split, siding with the

Fourth Circuit, in a case concerning a municipal

training ordinance that required contractors to offer

apprenticeships, which are benefits covered by ERISA.

See Merit Constr. All. v. City of Quincy, 759 F.3d 122

(1st Cir. 2014) (“Merit”). In holding the ordinance to be

preempted, the First Circuit adopted reasoning similar

9

to Fielder focusing on the ordinance’s effect on uniform

benefit administration. Merit, 759 F.3d at 131. In arriving

at its decision, the First Circuit specifically rejected the

reasoning of Golden Gate. Id.

The decision by the Ninth Circuit in this matter, and

by extension the Golden Gate decision on which it relies,

is in direct conflict with both the Fourth Circuit’s decision

in Fielder and the First Circuit’s decision in Merit. In

those cases, the courts rejected arguments that relied

on compliance with the laws at issue via other options

that theoretically allowed compliance without offending

ERISA. Id.; Fielder, 475 F.3d at 193, 196–97. Because an

alternate mode of compliance underpins the decision in

this matter and indeed also in Golden Gate, they are in

direct conflict with both Fielder and Merit.

II. ERISA Preemption Is Fundamental to Employers

Offering Health Coverage to Employees

By including a broad preemption provision in ERISA,

Congress made a deliberate policy choice to render federal

law the sole regulatory regime for multi-state employee

benefit plans. “In enacting ERISA, Congress also

intended to safeguard employers’ interests by ‘eliminating

the threat of conflicting and inconsistent State and local

regulation of employee benefit plans.’” Aloha Airlines,

Inc. v. Ahue, 12 F.3d 1498, 1501 (9th Cir. 1993). See also

Rutledge v. Pharm. Care Mgmt. Ass’n, 141 S. Ct. 474, 480

(2020); Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 320

(2016); Egelhoff v. Egelhoff, 532 U.S. 141, 148 (2001). One

key sponsor of the bill characterized ERISA’s preemption

provision as its “crowning achievement” and declared

that Congress “round[ed] out the protection afforded

10

participants by eliminating the threat of conflicting and

inconsistent State and local regulation.” 120 Cong. Rec.

29197 (1974) (statement of Rep. Dent).

It should be stressed that with the narrow

exceptions specified in [ERISA], the substantive

and enforcement provisions of the conference

substitute are intended to preempt the field

for Federal regulations, thus eliminating the

threat of conflicting or inconsistent State and

local regulation of employee benefit plans.

This principle is intended to apply in its

broadest sense to all actions of State or local

governments, or any instrumentality thereof,

which have the force or effect of law.

H.R. Conf. Rep. 93-1280, 1974 U.S.C.C.A.N. 5038, 5188.

In so doing, Congress was able to “minimize the

administrative and financial burden of complying with

conflicting directives among States or between States and

the Federal Government …, [and to prevent] the potential

for conflict in substantive law … requiring the tailoring

of plans and employer conduct to the peculiarities of the

law of each jurisdiction.” Golden Gate II, 558 F.3d at 1007

(Smith, J. dissenting) (alterations in original) (quoting

N.Y. State Conf. of Blue Cross & Blue Shield Plans. v.

Travelers Ins. Co., 514 U.S. 645, 656 (1995)).

ERISA preemption, and the uniformity of regulation

it affords, is essential for the longevity of our employersponsored benefit plan system for several significant

rea sons. V it a l ly, u n i for m it y c reat es i mpor t a nt

administrative efficiencies that permit plans to provide

11

generous benefits, by providing a single set of rules, thus

minimizing the cost and burden of tracking and complying

with different rules in each locality and state. In this way,

ERISA’s broad preemption of related state laws serves as

a principal means to accomplish the “congressional goal of

‘minimiz[ing] the administrative and financial burden[s]’

on plan administrators—burdens ultimately borne by the

beneficiaries.” Egelhoff, 532 U.S. at 149–50 (alterations in

original) (quoting Ingersoll-Rand Co. v. McClendon, 498

U.S. 133, 142 (1990)).

In addition, ERISA preemption and unifor m

regulation of employer-provided benefit plans allows

employers to tailor benefits to the unique needs of

employees, rather than providing benefits on the basis of

what each state and locality mandates. ERISA ensures

that employers face “a predictable set of liabilities, under

uniform standards of primary conduct and a uniform

regime of ultimate remedial orders and awards when a

violation has occurred.” Conkright v. Frommert, 559 U.S.

506, 516 (2010) (quoting Rush Prudential HMO, Inc. v.

Moran, 536 U.S. 355, 379 (2002)). This structure permits

employers to focus their efforts on providing appropriate

and meaningful benefits that are best suited for their

workforce based on their own unique business situations.

Furthermore, the regulatory uniformity provided

by ERISA gives employers the flexibility both to provide

the type of benefits best suited to the needs of their

employees and to provide them in an expedient fashion.

For example, in response to the COVID-19 pandemic,

many large employer plans quickly pivoted to provide their

participants and beneficiaries with access to telemedicine

to ensure that non-COVID-related care was available.

12

Deborah Pike Olsen, Private Insurers Expand Telehealth

Coverage, Which plans pay what — and how new state

rules factor in, AARP (Aug. 31, 2020), https://www.aarp.

org/health/conditions-treatments/info-2020/telehealthprivate-insurance-coverage.html; Devin M. Mann et al,

COVID-19 transforms health care through telemedicine:

Evidence from the field (2020), https://pubmed.ncbi.nlm.

nih.gov/32324855/#affiliation-1 (“Between March 2nd

and April 14th 2020, telemedicine visits [in the NYU

Langone Health system] increased from 102.4 daily to

801.6 daily[] (683% increase) in urgent care after the

system-wide expansion of virtual urgent care staff in

response to COVID-19.”). This was made possible, in very

large part, because of ERISA’s preemptive scope, which

allowed these employers to quickly operationalize and

implement vital telehealth coverage for their employees

and their families. While this is but one example, without

regulatory uniformity, these types of changes would be

impossible to accomplish, especially on short time frames

when necessary.

Moreover, uniformity also ensures that employers

can equitably offer similarly-situated employees the

same benefits regardless of where they live or work. This

essential benefit of ERISA preemption has become even

more valuable during the pandemic, as workplaces evolve

and employees’ place of work becomes less geographically

centralized. This not only supports fairness and consistency

but also, by reducing complexity and variation, supports

employee awareness. As any employer will attest to, and

as noted by the Ninth Circuit, “[u]niformity is essential to

ensuring that employees understand what benefits they

are entitled to and how to obtain them.” Golden Gate II,

558 F.3d at 1009 (Smith, J. dissenting).

13

The benefits of the uniformity granted by ERISA

preemption are apparent in our health care landscape

today. For more than 40 years, employers have proven

to be the backbone of the American health coverage

system. More than 177 million Americans, or 54.4 percent

of the U.S. population, receive health insurance through

employment-based benefit plans. Katherine KeislerStarkey & Lisa N. Bunch, Health Insurance Coverage

in the United States: 2020, U.S. Census Bureau, 4 (Sept.

2021), https://w w w.census.gov/content/dam/Census/

library/publications/2021/demo/p60-274.pdf. ERISA

preemption does not exist solely to protect health care

benefits either. Rather, employers rely on ERISA

preemption to more efficiently offer their employees all

forms of ERISA-covered benefits, including disability,

pension (both defined benefit and defined contribution),

and important ancillary benefits like life insurance. Fort

Halifax Packing Co. v. Coyne, 482 U.S. 1, 11 (1987) (“It

is thus clear that ERISA’s pre-emption provision was

prompted by recognition that employers establishing and

maintaining employee benefit plans are faced with the

task of coordinating complex administrative activities.

A patchwork scheme of regulation would introduce

considerable inefficiencies in benefit program operation,

which might lead those employers with existing plans to

reduce benefits, and those without such plans to refrain

from adopting them.”). For all these reasons, it is essential

that ERISA preemption be vigilantly protected, in order

to support employer-sponsored benefits and the millions

of Americans who receive them.

14

III. Golden Gate and its Progeny Render ERISA

Preemption Meaningless and Are Likely to Result

in Increased Health Coverage Costs and Fewer

Health Coverage Options

As Petitioner ably explains, state and local play-or-pay

laws, including the Seattle Ordinance, directly conflict

with ERISA’s preemption provision and the addition of an

“or-pay” option does nothing to change that fact. Amici

and their members are deeply concerned that the rule

adopted in Golden Gate, and reaffirmed by the Ninth

Circuit in this case, not only violates ERISA but also

furthers the potential for a labyrinth of well-intended, but

ultimately detrimental, state and local laws. The circuit

split and lack of clarity in the courts, combined with the

strong desire by state and local governments to impose

benefit mandates on ERISA-covered plans as described

by Petitioner, leaves the ground fertile for a substantial

increase in state and local mandates for employers to

contend with.

This is a matter of great concern for amici and their

members because it is inconsistent with ERISA and

the uniformity it affords, undermining the vast array

of attendant benefits described above. Relatedly, this

patchwork of state health coverage benefit mandates

creates a substantial concern that the regulatory landscape

will have the net effect of reducing or eliminating coverage

for many Americans. This is because the administrative

burdens imposed by conflicting State laws are no mere

theoretical concern. They have concrete consequences

for the many Americans who depend on ERISA plans

for their benefits. For example, with respect to health

plan coverage specifically, evidence shows that “each one

15

percent increase in … plans’ costs … results in a potential

loss of insurance coverage for about 315,000 individuals.”

Health Economics Practice, Barents Group, LLC,

Impacts of Four Legislative Provisions on Managed Care

Consumers: 1999-2003 iii (1998). The cumulative effect of

“[r]equiring ERISA administrators to master the relevant

laws of 50 States” is to massively increase the costs of

maintaining and operating a multi-state employee benefit

plan. Egelhoff, 532 U.S. at 149–50.

As amici local governments in the case below

made clear, the desire not just for states, but also for

local governments to adopt mandatory schemes like

the Seattle Ordinance is robust. The result of such

granular and potentially conflicting benefit mandates,

coverage requirements, and contribution requirements

for employers would result in not only enormous

administrative burdens on employers and ERISA-covered

plans, but are likely to materially reduce the generosity

and availability of employer-sponsored health coverage

more generally.

Even where employers only operate in a single state

or locality (as opposed to those that operate in multiple

states or localities, which we discuss infra), they could

face significant headwinds if localities were permitted

to regulate them in a manner similar to the law at issue

here. The additional administrative burdens of complying

with the additional layer of regulation could put them

at a significant disadvantage as compared to other

businesses that are not confronting similar rules, even

those businesses quite close in geographic proximity.

Further, these types of laws, if not preempted, could

impose material, additional expenses (either in the form

16

of additional benefits or cash payments) that could very

well stress the finances of smaller local businesses, many

of which may not have the needed financial reserves or

overall profitability to manage the additional economic

burdens presented. For many of these employers, they

may have no choice but to eliminate their benefit programs

rather than attempt to administer their benefit plans

within a complex web of federal, state and local laws. For

amici representing state and regional, as opposed to

national, employers this concern represents a material

threat to their plan offerings.

By ensuring efficiencies in the administration of

ERISA-covered plans, preemption allows employers to

offer health insurance coverage to their employees at

lower cost and with enhanced benefits over insurance

policies regulated by states, all while meeting rigorous

benefit and design requirements imposed by ERISA.

As noted above, when the administrative cost of offering

coverage increases, the availability and generosity of

benefits necessarily declines, leaving employees with

fewer, not more, health care resources, and eroding the

backbone of the American health care delivery system,

employer-sponsored health coverage.

Amici have similarly grave concerns outside the

context of health plan coverage. For example, a patchwork

of state and local laws applicable to retirement benefits

(such as 401(k) plan contributions, profit sharing plan

contributions, and/or traditional pension benefits or

accruals) could drive up benefit as well as administrative

costs, and could also place employers in the position

of facing conflicting vesting and asset management

requirements. Not only are such laws administratively

difficult for plan sponsors, they also materially increase

17

the likelihood of employee confusion, as different

employees in different locales could have varying benefits

while having to meet different requirements to access

those benefits (either in the form of different vesting rules

or in administrative differences imposed on employers in

terms of claims forms). This would become particularly

acute if a state or locality adopted fiduciary requirements

inconsistent with those that are imposed under ERISA.

These types of play-or-pay requirements could also

materially alter the availability and generosity of other

important benefits, like employee assistance programs,

life insurance, and apprenticeship programs, all of which

are covered by ERISA, and all of which are important

components of employee compensation and retention.

A useful example that illuminates the problems

associated with the potential inconsistent and often

contradictory regulation of employee benefits arises in the

context of state and local paid leave laws. Employers are

currently, generally subject to a variety of leave laws at

the local, state, and even federal level. In a recent survey

of employers by Business Group on Health, 77 percent of

respondents indicated that complying with state and local

leave laws was their “greatest challenge” in administering

their leave programs, with 70 percent of respondents

preferring a uniform federal approach to leave laws. 2

The following hypothetical illustrates the complexities

and administrative burdens that can confront employers

2. Business Group on Health, 2020 Large Employers’ Leave

Strategy and Transformation Survey, (Jan. 31, 2020), https://www.

businessgrouphealth.org/resources/2020-large-employers-leavestrategy-and-transformation-survey.

18

when they have to comply with a myriad of state, city and

local laws. Assume a hypothetical company (“Company”)

is domiciled in New York City and has employees living

and working not only in New York City, but also in

neighboring cities and towns across the States of New

York, New Jersey, and Connecticut. For Company to

ensure compliance with applicable city, state, and other

local leave laws, it must take account of at least fourteen

state and local laws, including not only the New York

City3 paid leave law, but also the paid sick leave laws of

Westchester County4 and New York State5, the state laws

of Connecticut6 and New Jersey,7 and at least nine local

New Jersey8 laws.

As this one example demonstrates, the burdens

imposed on even a tristate employer can be severe. When

extrapolated to the burdens imposed upon employers

operating not just in the three states noted above, but

also the various state and local government’s desirous of

imposing benefit mandates or other ordinances, like the

Seattle Ordinance on self-insured group health plans, the

3. N.Y.C., N.Y., Code §§ 20-911–924.

4. Westchester Cnty., N.Y., Code §§ 585.01–16.

5. N.Y. Lab. Law § 196-b (McKinney 2020).

6. Conn. Gen. Stat. Ann. §§ 31-57r–57x (West).

7. N.J. Stat. Ann. §§ 34:11d-1–d-11 (West).

8. Twp. of Bloomfield, N.J., Code §§ 160-1–16; City of East

Orange, N.J., Code §§ 140-1–15; Twp. of Irvington, N.J., Code §§

277-1–14; City of Jersey City, N.J., Code §§4-1–10; Twp. of Montclair,

N.J., Code §§ 132-1–14; City of Newark, N.J., Code §§16:18-1–15; City

of Passaic, N.J., Code §§ 128-1–14; City of Patterson, N.J., Code §§

412-1–13; City of Trenton, N.J., Code §§ 230-1–13.

19

burden becomes insurmountable. Moreover, unlike paid

leave, where an employer may have some possibility of

creating a paid leave policy that meets the requirements

of all jurisdictions in which it employs individuals, health

coverage and health coverage requirements pose an

extraordinary level of complexity, with the potential

for one locality to require coverage of a given service

while another precludes such coverage. Not only does

this complexity result in significant costs to employers,

but it also vastly increases the potential for ERISA plan

participants to be confused regarding the coverage to

which they are entitled, a chief goal of ERISA’s detailed

disclosure requirements. See Curtiss-Wright Corp. v.

Schoonejongen, 514 U.S. 73, 83 (1995).

Should the Ninth Circuit’s decision stand, employers

could face extraordinary and potentially conflicting

variability in the amount and type of benefits they must

offer. For example, a large national employer might have

to offer a certain type of coverage in one state or locality

(such as comprehensive group major medical coverage),

similar to the Seattle Ordinance, while being required

to offer a different form of coverage to similar types of

employees in another state (such as employer-subsidized

individual market coverage or an employer-funded

medical savings account). In both cases, the state would

effectively dictate the eligibility or benefit requirements

of the plan, or expose the employer to a penalty. This

concern becomes particularly acute with large employers

that have diversified businesses, where they might

have employees in shipping and retail that are subject

to different requirements depending upon the state or

locality’s views of how employees of that type should be

offered health insurance coverage.

20

To be clear, under ERISA, such a result is not

permitted. It would lead to a complete erosion of uniform

plan administration. Notwithstanding this fact, the Ninth

Circuit would view both states and localities as having this

flexibility as long as employers could comply by incurring

some expense outside the plan (i.e., the “or-pay” option).

As a practical matter, the employer would be required to

create separate plans or benefit arrangements for separate

groups of employees depending on their residency or

place of employment. Of course, this is precisely what the

Seattle Ordinance accomplishes because the tax benefits

to employees of receiving health insurance coverage

through a group health plan renders the “or pay” option

all but meaningless—as a result, employers subject to the

Seattle Ordinance must amend or create group health

plans to meet local requirements in Seattle. And, the

concept that such local activity is limited to Seattle has

been dispelled by amici city and local governments in the

case below. The ERISA Indus. Comm. v. City of Seattle,

No. 20-35472, 2020 WL 6682044, at *29 (9th Cir. 2020)

(“Other large cities, including New York and Los Angeles,

are also pursuing local healthcare reforms.”).

While this type of activity is not cabined to the Ninth

Circuit, even within the confines of the Ninth Circuit,

employers face significant administrative burdens. For

example, a hotelier with venues in Seattle,9 San Francisco,10

9. See Seattle Ordinance.

10. See S.F., Cal., Admin. Code ch. 14, S.F. Health Care Security

Ordinance, https://codelibrary.amlegal.com/codes/san_francisco/

latest/sf_admin/0-0-0-9099.

21

and Oakland,11 potentially faces three distinct mandates

with respect to the health care it offers its employees.

When employers are forced to deal with the administrative

costs associated with meeting these various local regimes,

a number of results can ensue. These state and local laws

result in less efficient, more costly coverage, which in turn

has the effect of either reducing the generosity of benefits

for employees as a whole, increasing the cost to employees

of the coverage, or limiting coverage for employees in

other localities.

As this Court has made clear, ERISA’s preemptive

force is extensive, and is focused largely on providing

a regulatory regime where employer plans can operate

under uniform coverage and benefit rules. Rutledge,

141 S. Ct. at 480; Gobeille, 577 U.S. at 320; Egelhoff, 532

U.S. at 148. ERISA’s preemption provision embodies the

“congressional goal of ‘minimiz[ing] the administrative

and financial burden[s]’ on plan administrators—burdens

ultimately borne by the beneficiaries.” Egelhoff, 532 U.S.

at 149–50 (alteration in original). That goal is clearly

frustrated by Golden Gate and the potential for increased

burdens under Golden Gate appears more apparent today

than it has since the Ninth Circuit ruled. Because there

is no doubt that the dilemma faced by a hotelier in the

Ninth Circuit, let alone a nationwide employer facing our

hypothetical conflicting laws, was one Congress intended

to foreclose, the Ninth Circuit’s rule must fall in the face

of ERISA preemption.

11. Oakland, Cal., Mun. Code ch. 5.93, Hotel Minimum

Wage and Working Conditions, https://library.municode.com/ca/

oakland/codes/code_of_ordinances?nodeId=TIT5BUTAPERE_

CH5.93HOMIWAWOCO.

22

Moreover, while Congress has made some statutory

changes to ERISA since its enactment, Congress has not

materially altered ERISA’s preemption provision. All of

which makes clear that despite the hopes and desires

of state and local lawmakers, the field of self-insured,

employer-sponsored health care regulation remains

squarely a matter of federal law, and any attempt by

a state or local government to subvert the flexibility

that employers have in offering their benefit plans runs

squarely in the face of ERISA preemption, particularly

when considered in light of the material adverse

consequences to both employers and employees of such

non-federal action.

CONCLUSION

Amici respectfully request that the Court grant the

petition.

Respectfully submitted,

Mark C. Nielsen

Counsel of Record

Seth T. Perretta

Ryan C. Temme

Matthew W. Lanahan

Groom Law Group, Chartered

1701 Pennsylvania Avenue, N.W., Suite 1200

Washington, D.C. 20006

(202) 867-0620

mnielsen@groom.com

Counsel for Amici Curiae

February 18, 2022