Amicus Curiae Brief — Metropolitan Life Insurance v. Massachusetts

(io OY FILED

Nos. 84-825, 84-356 DEC 21 1984

———

ALEXANDER L. STEVASs

OCTOBER TERM, 1984

METROPOLITAN LIFE INSURANCE COMPANY,

7 Appellant

COMMON WEALTH OF MASSACHUSETTS,

Appellee

THE TRAVELERS INSURANCE COMPANY,

. Appellant

COMMONWEALTH OF MASSACHUSETTS,

Appellee

On Appeals from the Supreme Judicial Court

of Massachusetts

BRIEF AMICUS CURIAE OF THE

NATIONAL COORDINATING COMMITTEE FOR

MULTIEMPLOYER PLANS IN SUPPORT

OF APPELLANTS

Of Counsel: GERALD M. FEDER *

NIK B. EDES

ARNOLD & PORTER

1200 New Hampshire Ave., N.W. DAVID R. LEVIN

Washington, D.C. 20036 FEDER & EDES

(202) 872-6700 1§27 18th Street, N.W.

Washington, D.C. 20036

(202) 387-1515

Attorneys for National

Coordinating Committee for

Multiemployer Plans

* (Counsel of Record)

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON, D.C. 20001

@ ES «0

TABLE OF CONTENTS

Page

INTEREST OF THE NATIONAL COORDINATING

COMMITTEE FOR MULTIEMPLOYER PLANS.... 2

SUMMARY OF REASONS FOR REVERSAL ............ 3

REASONS FOR REVERSAL 5

A. The decision below conflicts with ERISA’s pre-

emption clause, as construed in the contempora-

neous and subsequent legislative history inter-

preting the statute 5

B. The argument of the Commonwealth and the

reasoning of its high court conflict not only with

one another, but also with decisions of this

Court. 11

CONCLUSION 14

ii

TABLE OF AUTHORITIES

Cases: Page

Agsalud v. Standard Oil Co. of California, 633

F.2d 760 (9th Cir.), aff'd mem., 451 U.S. 801

§ |) ee 3, 4, 6, 13

Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504

{| Ee eth ...passim

Hewlett Packard Co. v. Barnes, 571 F.2d 502 (9th

Cir.), cert. denied, 439 U.S. 831 (1978) ............ 14

M’Culloch v. Maryland, 14 U.S. (4 Wheat.) 431

(1819) csacttnistatssasinpaistisiniipeaiaa eas 10

Mich. United Food & Com. Wkrs. Unions v. Baer-

waldt, 572 F. Supp. 943 (E.D. Mich.), appeal

Statutes:

docketed, No. 83-1570 (6th Cir. Aug. 16, 1983)... 9

Shaw v. Delta Air Lines, Inc., 51 U.S.L.W. 4968

(U.S. June 21, 1983) -......... passim

Train v. Colorado Public Interest Research Group,

us.. GB UE 3 GRC Ee <cccceee 13

UMWA Health & Retirement Funds v. Robinson,

455 U.S. 562 (1982) . 9

United States v. American Trucking Ass’ns., 310

U.S. 534 (1940) . 13

Employee Retirement Income Security Act

Section 2(a), 29 U.S.C. § 1001(a) 2.02... 8, 10

Section 3(1), 29 U.S.C. § 1002(1) oe. 9

Section 3(37), 29 U.S.C. § 1002(37) —......... 10

Sectidn 514, 29 U.S.C. § 1144 2, 6, 8

Section 514(a), 29 U.S.C. § 1144(a) 0. 5, 6,11

Section 514(b), 29 U.S.C. § 1144(b) 2. 10, 14

Section 514(b) (2) (A), 29 U.S.C. § 1144(b)

(2) (A) 5,9

Section 514(b) (2) (B), 29 U.S.C. § 1144(b)

(2) (B) 18

Section 514(b) (5), 29 U.S.C. § 1144(b) (5) _.. 6

Hawaii Prepaid Health Care Act, Haw. Rev. Stat.

§§ 393-1 - 393-51 6,13

Mass. Gen. Laws, Ch. 175, § 47B _.......... 8, 4, 9, 11, 12

Periodic Payment Settlement Act of 1982, Pub. L.

97-473, 96 Stat. 2605 (1983) 4,6

iii

TABLE OF AUTHORITIES—Continued

Legislative Materials:

Hearings before the Committee on Labor and Hu-

man Resources, United States Senate, 96th

Cong., 1st Sess. on 8.209 (1979)

Statement of the National Asscviation of Insur-

ance Commissions on S.209, presented to the

Committee on Labor and Human Resources,

United States Senate, March 22, 1979 -..............

Statement of Sens. Inouye and Matsunaga on

§.209, presented to the Committee on Labor and

Human Resources, United States Senate, Feb. 7,

1979 :

SS "| rn

120 Cong. Rec. 29933 (1974) ........

nnceesuenncnnee

125 Cong. Rec. 947 (1979) ......

Page

aAartan w

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

Nos. 84-325, 84-356

METROPOLITAN LIFE INSURANCE COMPANY,

¥ Appellant

COMMONWEALTH OF MASSACHUSETTS,

Appellee

THE TRAVELERS INSURANCE COMPANY,

- Appellant

COMMONWEALTH OF MASSACHUSETTS, ©

| Appellee

On Appeals from the Supreme Judicial Court

of Massachusetts

BRIEF AMICUS CURIAE OF THE

NATIONAL COORDINATING COMMITTEE

FOR MULTIEMPLOYER PLANS

The National Coordinating Committee for Multiem-

ployer Plans submits this brief amicus curiae in support

of Appellants. Copies of letters written by counsel for

Appellants and Appellee granting the parties’ consent to

this submission are on file with the Clerk of the Court.

2

INTEREST OF THE NATIONAL COORDINATING

COMMITTEE FOR MULTIEMPLOYER PLANS

The National Coordinating Committee for Multiem-

ployer Plans (the “NCCMP”), pursuant to the written

consent of the parties, submits this brief urging reversal

of the decision of the Supreme Judicial Court of Massa-

chusetts that a State statute requiring insured employee

benefit plans to provide particular medical benefits is not

preempted by section 514 of the Employee Retirement

Income Security Act (“ERISA”), 29 U.S.C. § 1144. The

NCCMP is a nonprofit, tax-exempt organization formed

after the enactment of ERISA to participate in the de-

velopment of employee benefit legislation and government

regulations under ERISA and other laws affecting multi-

employer plans. More than 140 multiemployer plans and

related international unions are affiliated with the

NCCMP. These plans are representative of all the na-

tion’s multiemployer plans, covering more than eight mil-

lion workers. The NCCMP’s affiliates together represent

the majority of participants in such plans.

As set forth in this brief, the NCCMP submits that

the decision below directly contravenes the national em-

ployee benefits policy established by Congress and con-

sistently upheld by this Court. Consequently, the decision

of the Supreme Judicial Court of Massachusetts will

have a significant adverse effect upon the nation’s multi-

employer plans and the health and welfare of the mil-

lions of such plans’ participants. The NCCMP is con-

cerned that the failure to reverse the State supreme

court’s decision would discourage the establishment and

continuance of multiemployer benefit plans, which, by

definition, are created and maintained pursuant to the

collective bargaining process.

Because ‘multiemployer plans cover workers in broad

geographical areas and typically span State lines, any-

thing less than a reversal of the decision below would

wholly frustrate multiemployer plan trustees who would

be forced to administer plans pursuant to a disarray of

potentially conflicting State laws. Plan trustees would

be unable to avoid the chaotic result of fifty-one juris-

dictions enacting numerous, differing laws dictating

which benefits the plans must provide. State mandated

benefit statutes, like Section 47B of Massachusetts Gen-

eral Laws, Chapter 175 (hereinafter “Section 47B”),

profoundly affect the structure, administration, and type

of benefits provided by plans. The power to mandate

plan benefits is the functional equivalent of the power

to mandate plan costs, i.e., employer contributions to fund

the benefits. Moreover, the exercise of such power by a

State government would outright remove the terms of

benefit plans from the collective bargaining process, the

sole context in which multiemployer plans are created

and maintained. In the name of regulating “insurance”,

the Commonwealth of Massachusetts seeks to eviscerate

ERISA’s preemption clause, thereby threatening the

growth and stability of multiemployer benefit plans.

SUMMARY OF REASONS FOR REVERSAL

A. Consistent with established Congressional policy

and the express interpretation of ERISA by its drafters,

this Court has declared that ERISA’s preemption of State

laws is to be sweeping, and its exceptions to preemption

narrow. Shaw v. Delta Air Lines, Inc. (“Shaw”), 51

U.S.L.W. 4968 (U.S. June 21, 1983) ; Alessi v. Raybestos-

Manhattan, Inc. (“Alessi”), 451 U.S 504 (1981). By

virtue of this clear policy of federal preemption, this

Court has refused to permit State regulation of employee

benefit plans either directly or indirectly. Id.; Agsalud

v. Standard Oil Co. of California (“Agsalud’”’), 633 F.2d

760 (9th Cir. 1980), aff'd mem., 454 U.S. 801 (1981).

Yet, contrary to these fundamental principles, the court

below attempts to make benefit plans a subject of State

regulation, thereby maximizing the burden of interstate

4

plan administration and minimizing the salutary Con-

gressional purposes of federal preemption. Furthermore,

the lower court’s decision to uphold a mandated benefit

statute like Section 47B is completely at odds with the

view of Congress that only by expressly amending

ERISA could there be an exemption from preemption of

a State insurance law mandating specific benefits to be

provided by employee plans. Title III, §301(a) of the

Periodic Payment Settlement Act, Pub. L. 97-473, 96

Stat. 2605, 2611 (1983).

B. In reaching its decision that Section 47B was not

preempted by ERISA, the high court of the Common-

wealth held the scope of ERISA’s preemption to be lim-

ited solely to State laws which squarely conflict with the

subject matter covered by ERISA. Subsequent tw the

State court decision, this Court in Shaw rejected such a

“conflict analysis”, 51 U.S.L.W. at 4970-72. Although

this Court remanded the instant cases to the State court

for review in light of Shaw, on remand the State court

turned a deaf ear to the opinions of this Court and re-

verted to the “conflict analysis.” Moreover, recognizing

that the decision below is directly inapposite to the most

recent enunciation by this Court of the scope and under-

lying purpose of federal preemption under ERISA, Shaw,

supra, the Appellee is forced to resurrect the discredited

argument it made below that any State statute which

applies to insurance is saved from preemption. (J.S.

App. D, 21a).*, However, this “insurance” argument was

not only expressly rejected below by the Supreme Judi-

cial Court of Massachusetts, id., but it also conflicts with

decisions of this Court and the express intent of Con-

gress. See, Shaw, supra; Alessi, supra; and Agsalud,

supra.

1“J.S. App.” refers to the separately bound appendix filed jointly

in this Court by the Appellants in the instant cases.

5

REASONS FOR REVERSAL

A. The decision below conflicts with ERISA’s preemption

clauses, as construed in the contemporaneous and sub-

sequent legislative history interpreting the statute.

The legislative history of ERISA reflects a profound

Congressional insight as to the problems that would be

faced by employee benefit plans which operate across

State lines, were such plans obligated to comply with

varying State laws regulating the structure and terms

of the plans. See, eg., Shaw, supra, 51 U.S.L.W. at

4973. Congress sought to alleviate the potential for chaos

by enacting a broad preemption provision as part of

ERISA. Moreover, “ERISA’s authors clearly meant to

preclude States from avoiding through form the sub-

stance of the preemption program.” Alessi, supra, 451

U.S. at 525.

The federal statute’s authors went on the record to

“make it clear that a State insurance law which re-

quires that a particular benefit be provided by an in-

surer selling policies to employee benefit plans covered by

ERISA is preempted and is not saved from preemption

by the exception for State laws which regulate the insur-

ance industry.” 125 Cong. Rec. 931 (1979) (remarks of

Sen. Williams). See, id., at 947 (remarks of Sen. Jav-

its). These Senators—not only principal proponents of

ERISA from its genesis but also leaders of the Confer-

ence Committee which ultimately drafted the sweeping

preemption language of ERISA— took the position that

any State statute mandating benefits is preempted be-

cause it is a law which “relates to any employee benefit

plan”, ERISA Section 514(a), 29 U.S.C. § 1144(a);

ERISA’s drafters flatly rejected the proposition that

such a State statute is a law which “regulates insur-

ance”, ERISA Section 514(b) (2) (A), 29 U.S.C. § 1144

(b) (2) (A). See, Hearings before the Committee on

Labor and Human Resources, United States Senate, 96th

Cong., 1st Sess. on S. 209, passim (1979).

This Court acknowledges that when Congress chose to

preempt all State laws that “relate to any employee bene-

fit plan”, ERISA Section 514(a), 29 U.S.C. § 1144(a),

“Congress used the words ‘relate to’. . . in their broad

sense”, Shaw, supra, 51 U.S.L.W. at 4971, thereby “cre-

ating only very limited exceptions to preemption,” id. at

4972. By establishing employee benefit plan regulation

“as exclusively a federal concern,” Alessi, supra, 451

U.S. at 528, the drafters of ERISA believed they had

“eliminat{ed] the threat of conflicting and inconsistent

State and local regulation.” 120 Cong. Rec. 29197

(1974) (remarks of Rep. Dent). See, id. at 29933 (re-

marks of Sen. Williams).

Consistent with the express intent of ERISA’s draft-

ers, this Court has affirmed that ERISA preempts the

mandated benefit provisions of the Hawaii Prepaid

Health Care Act (“HPHCA”), Agsalud, supra, to the

extent the HPHCA affects employee plans. For, “[tjo

hold that a state health insurance law does not regulate

directly or indirectly the terms and conditions of em-

ployee benefit plans would distort the meaning of those

words [in ERISA Section 514(a)] beyond recognition.”

Agsalud, supra, 633 F.2d at 767. Accord, Alessi, supra,

451 U.S. at 525.

The Congressional response to the ruling in Agsalud

squarely ratified the judiciary’s interpretation of ERISA.

Recognizing that the law had been correctly construed

in Agsalud, but desiring to preserve the HPHCA, Con-

gress enacted a specific exception to ERISA Section 514

for that sole and express purpose. Title III, § 301(a)

of the Periodic Payment Settlement Act of 1982, Pub.

L. 97-473, 96 Stat. 2605, 2611 (1983), adding Section

514(b) (5), 29 U.S.C. § 1144(b) (5), to ERISA?

2It is worthy of note that the Hawaii Act specifically permits

employees to bargain collectively with their employers for health

benefits that may differ from those specified in the law. Thus,

7

Furthermore, last term this Court held that New

York may not enforce its insurance laws “through regu-

lation of ERISA-covered benefit plans.” Shaw, supra, 51

U.S.L.W. at 4974. In that case, this Court concluded

that Congress, in enacting ERISA, intended to encour-

age uniform, interstate employee plans by choosing to

preempt conflicting and inconsistent State and local regu-

lations.

Against this backdrop, the Supreme Judicial Court of

Massachusetts noted the conclusions reached by this

Court in Shaw, but refused to find the State mandated

benefit law preempted. The State court instead held that

Congressional intent enunciated by this Court in Shaw

was “inconsistent with the broad language of the insur-

ance exception.” (J.S. App. A, 6a). But, the statutory

language the State court denominated as “broad”, has

been referred to by this Court in Shaw as “narrow” and

“limited”, 51 U.S.L.W. at 4972. And, although this Court

holds that the federal government, through ERISA, has

left to the discretion of the private parties that create

the plan the determination of what benefits a plan should

contain, Alessi, supra, 451 U.S. at 511, 525, the court

below clings to the view that such control reposes with

the State. The State court simply fails to acknowledge

“the direct clash between the state statute and the fed-

eral policy to keep the calculation of [plan] benefits a

subject of either labor-management negotiations or fed-

eral legislation,” Alessi, supra, 451 U.S. at 526, n.22.

See, id., at 525.

The adverse consequences of the lower court’s ruling

are evident. Even the insurance commissioners of the

fifty States recognize the Congressional determination

that employee benefit plans “have become an important

even though the enactment of the HPHCA exception lifted the veil

of preemption ever so slightly, in so doing, Congress restated its

derire for preservation of benefit plans negotiated through the

collective bargaining process.

factor in commerce because of the interstate character

of their activities,’ ERISA Section 2(a), 29 U.S.C.

§ 1001(a), and acknowledge inherent dangers in inter-

fering with the

federal interest in uniform regulation of employee

benefit plans....

[T]he imposition of mandatory benefits may in-

crease health care costs of employee benefit plans

.... [MlJandatory health benefit laws may impose

administrative burdens on employee benefit plan

managers attempting to comply with varying state

requirements. A third problem which diverse man-

dated benefits may create for employee benefit plans

is the impact of such benefits on industrial relations.

If different levels of benefits are provided to the em-

ployees in different states it is possible that employ-

ers [unions, and plan trustees] will be accused of

being unfair in offering benefits to employees in

some states while not offering those same benefits to

employees in other states.

Statement of the National Association of Insurance Com-

missioners (“NAIC”)* on S. 209 at 3, presented to the

Committee on Labor and Human Resources, United

States Senate, March 22, 1979. Thus, it is clear that the

lower court’s decision upholding a mandated benefit stat-

ute serves to weaken the multiemployer plan system,

which Congress has consistently sought to nurture.

ERISA Section 2(a), 29 U.S.C. § 1001 (a).

The merits of the individual State law in question are

irrelevant in deciding to what extent preemption should

be extended or circumscribed. To hold that the insur-

3 The NAIC is a voluntary association of the principal insurance

regulatory officials of the fifty states, the District of Columbia,

Guam, and Puerto Rico. The NAIC has recognized the “strong

congressional interest in uniform regulation of employee benefit

plans” and acknowledged at a minimum that Congress did “declare

its preference for federal regulation” by enacting ERISA section

514. Statement of NAIC on 8.209 at 4.

9

ance saving clause of ERISA Section 514(b) (2) (A), 29

U.S.C. § 1144(b) (2) (A), preserves one mandated bene-

fit law—whatever its merits—would be to foster non-

uniformity, and conjure up the nightmare of at least

fifty-one differing and conflicting laws. The impact of

the decision below simply runs counter to ERISA’s aim

of national harmony in plan regulation. Shaw, supra,

51 U.S.L.W. at 4971, n.20 and 4978, n.25. See, Mich.

United Food & Com. Wkr. Unions v. Baerwaldt, 572

F. Supp. 943, 948-51 (E.D. Mich), appeal docketed, No.

83-1570 (6th Cir. Aug. 16, 1983).

Under ERISA, Congress left to the discretion of those

who establish and/or administer employee plans the de-

cision whether or not to provide health and welfare bene-

fits “through the purchase of insurance,” ERISA Section

3(1), 29 U.S.C. § 1002(1). The Commonwealth’s man-

dated benefit statute drastically intrudes upon that dis-

cretion. “Because a plan that purchases insurance has

no choice but to provide [the State mandated] benefits,

the insurance provisions of § 47B effectively control the

content of insured plans.” (J.S. App. D, 20a). Plans

will be forced either to self-insure or to provide—if they

have the financial wherewithal and if the State laws are

not conflicting—every benefit mandated by every State

in which the plan participants work and by every State

in which the plan participants reside.* For, mandated

benefit statutes are nothing less than the back door

through which States seek to enter a field that Congress

* Furthermore, if States have the power to add to the list of

benefits that plans must provide, States would have the correspond-

ing power to preclude plans from offering particular benefits.

For example, the State might choose to limit participants’ access

to psychiatric social workers unless a medical doctor were in

attendance, or preclude the use of chiropractic services. Such

State interference with the freedom of plan design and the

fiduciary judgment of trustees is contrary to the regulatory scheme

intended by Congress. See, Alessi, supra. Accord, UMWA Health

& Retirement Funds v. Robinson, 455 U.S. 562 (1982).

10

expressly prohibited from State intrusion. See, e.g.,

Shaw, supra; Alessi, supra.

Moreover, by being able to mandate benefits, States

can mandate costs. Ceding to the States the power to

mandate plan benefits and costs wrenches the whole

realm of multiemployer plans from the context in which

ERISA permits them to exist—that of collective bargain-

ing. ERISA Section 3(37), 29 U.S.C. § 1002(37). And,

where plans result “from collective bargaining, the addi-

tional federal interest in precluding state interference

with labor-management negotiations calls for pre-emp-

tion of state efforts to regulate [plan] terms.” Alessi,

supra, 451 U.S. at 525.

Finally, it has long been recognized that the power to

impose costs is the equivalent of the “power to destroy

[and] that the power to destroy may defeat and render

useless the power to create.” M’Culloch v. Maryland, 14

U.S. (4 Wheat.) 431 (1819). Surely, the Congress did

not intend that through the ERISA Section 514(b) in-

surance saving clause, the States would both eviscerate

the preemption clause, as well as impose a stranglehold

on the very plans, which the federal statute was designed

to foster. See, ERISA Section 2(a), 29 U.S.C. § 1001 (a).

The decision below creates cacophony, rather than

harmony with the decisions of this Court and the express

intent of ERISA and its founding fathers. Reversal of

the decision below and affirmance of the interpretation

of those who drafted ERISA allow the unfettered nego-

tiation of benefit coverage without the interference of

mandated benefit restraints. Plans would be free to re-

tain the protection afforded by insurance and the vast

majority of State regulation that works effectively in

that area without State control over the structure, ad-

ministration, and type of benefits provided by plans.

11

B. The argument of the Commonwealth and the reason-

ing of its high court conflict not only with one another,

but also with decisions of this Court.

The Supreme Judicial Court of Massachusetts rejected

the arguments asserted by the Commonwealth, but up-

held the State statute. The State court concluded that

“Section 47B affects only the substantive content of

plans—a subject completely untouched by ERISA’s regu-

latory provisions” (J.S. App. D, 22a)—and that conse-

quently the State law cannot be in conflict with those

provisions. The court then held that absent a conflict,

the State statute withstood preemption. Jd. This “con-

flict analysis” is merely another form of the theory that

where a State law does not directly regulate plans but

has only a collateral effect, the State law is not pre-

empted.

Not only did this Court refuse to accept the “collat-

eral effect theory” in Alessi, supra, 451 U.S. at 525, but

it specifically rejected the “conflict analysis” in Shaw,

supra, 51 U.S.L.W. at 4971. This Court has made it

clear that in testing the scope of ERISA preemption, the

relevant inquiry is not whether there is a conflict between

federal and State law, but rather whether and to what

extent the State laws “relate to” plans, ERISA Section

514(a), 29 U.S.C. §1144(a). See, Shaw, supra, 51

U.S.L.W. at 4971-72. This Court acknowledges the im-

portance that the Congress attaches to the need for uni-

form administration of interstate plans, free from the

interference and chaos that would otherwise be part of

every border crossing.

The Shaw decision should have completed the circle,

closing any State manufactured loopholes in preemption,

by merging judicial construction of ERISA with the in-

terpretation of ERISA’s drafters. As the sole dissenting

Massachusetts Justice correctly recognized on remand,

Section 47B must be preempted, because it is not a law

12

that “regulates insurance” within the meaning of

ERISA’s saving clause. (J.S. App. A, 8a).

However, in the majority opinion, the State court in-

sisted again on utilizing the “conflict analysis” that was

rejected in Shaw. The court reiterated that the State

statute “makes no attempt to regulate employee benefit

plans directly,”* but at the same time the court ac-

knowledged that Section 47B “effectively controls the con-

tent of insured welfare benefit plans.” (J.S. App. D,

20a). Thus, by its decision, the State court chose to

undermine the uniform federal system of employee bene-

fit plans, thereby placing the good of the Commonwealth

ahead of the common good.

Perhaps because it recognizes that this Court rejected

the “conflict analysis” upon which the lower court’s deci-

sion rests, the Commonwealth has chosen to revive the

argument it made below that where a State statute “ap-

plies to insurance and does not treat plans as insurers it

is not preempted.” (J.S. App. D, 21a). Yet, even the

court below expressly rejected that argument. The State

court was “wary of such a literal reading, which might

permit the State, through its insurance laws, to...

negate the unmistakable intent of Congress to work a

5 The NCCMP asserts that there is nothing “indirect” about

regulation of employee plans under the State statute. The Supreme

Judicial Court takes the position that State regulation of the sub-

ject insurance policy is not direct regulation of plans. However,

the Massachusetts Superior Court held that “the insurance policies

involved here are employee benefit plans within the meaning of

[ERISA Section 4(a)] and are not within the exceptions contaired

in [ERISA Section 4(b)].” (J.S. App. I, 74a). This holding of

the superior court has not been challenged and is, thus, the law of

the case. Since Section 47B is agreed by all to regulate these

policies directly, and since these policies are held tc be employee

plans, than Section 47B directly regulates employee plans. Con-

sequently, it defies logic that the State statute was not held below

to be preempted.

13

broad preemption.” * Jd. Moreover, the Appellee’s posi-

tion stands in direct conflict with recent decisions of this

Court.

In Shaw, this Court addressed the enforceability of a

State disability insurance law with respect to employee

plans covered by ERISA. 51 U.S.L.W. at 4973-74. The

State statute in Shaw was on its face an “insurance

law”, id. at 4973, and it did not treat plans as insurers,

see, ERISA Section 514(b) (2) (B), 29 U.S.C. § 1144(b)

(2)(B). Therefore, using the Appellee’s approach, the

statute in Shaw would have been enforceable against

ERISA plans. However, this Court held the statute un-

enforceable, Shaw, supra, 51 U.S.L.W. at 4974.

So, too, in Agsalud, this Court was asked specifically

to address the interaction between the HPHCA, a state

law mandating benefits, and a nationally-based employee

benefit plan that provided health benefits. See, Agsalud,

supra, 633 F.2d at 763. The facts of the case reveal that

the State statute required employers doing business in

Hawaii to provide specific benefits, some of which the

Standard Oil Company was not providing in its plan, id.

There is no dispute that the HPHCA is an insurance

law, and it does not deem emp.uyee plans to be insurers.

See, e.g., Statement of Sens. Inouye and Matsunaga on

S. 209, presented to the Committee on Labor and Human

Resources, United States Senate, Feb. 7, 1979. Thus,

pursuant to the position of the Appellee Commonwealth,

the Hawaii statute should have been enforceable against

ERISA plans. However, this Court affirmed the decision

of the Ninth Circuit Court of Appeals in Agsalud, hold-

ing that ERISA precluded the enforcement of the

HPHCA as it relates to employee plans covered by

This Court has expressed its disfavor, too, with the plain

meaning rule of construction embraced by the Appellee. Train v.

Colorado Public Interest Research Group, Inc., 426 U.S. 1, 10

(1976) (quoting United States v. American Trucking Ass’ns., 310

U.S. 584, 548-44 (1940) ).

14

ERISA, 454 U.S. 801 (1981). Accord, Hewlett-Packard

Co. v. Barnes, 571 F.2d 502 (9th Cir.), cert. denied, 439

U.S. 831 (1978). Nevertheless, the Appellee persists in

seeking to advance State circumvention of ERISA’s pre-

emptive provisions by asserting that the ERISA Section

514(b) exception swallows the rule.

CONCLUSION

For the foregoing reasons, the NCCMP respectfully

urges this Couri to reverse the decision of the Supreme

Judicial Court of Massachusetts in these cases.

Respectfully submitted,

Of Counsel: GERALD M. FEDER *

ARNOLD & PORTER NIK B. EDES

1200 New Hampshire Ave., N.W. Davi R. LEVIN

Washington, D.C. 20036 FEDER & EDES

(202) 872-6700 1527 18th Street, N.W.

Washington, D.C. 20036

(202) 387-1515

Attorneys for National

Coordinating Committee for

Multiemployer Plans

* (Counsel of Record)

Dated: December 20, 1984