# Reply Brief — Ingersoll-Rand Co. v. McClendon

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 1990
- **Citation:** 498 U.S. 133

## Text

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No. 89-1298 ey; 21 Be
IP ANIOL JR.

IN THE

Supreme Court of the United Sittes

OCTOBER TERM, 1990

INGERSOLL-RAND COMPANY,
Petitioner,

PERRY MCCLENDON,
Respondent.

On Writ of Certiorari to the Supreme Court of Texas

REPLY BRIEF FOR THE PETITIONER

GLEN D. NAGER
(Counsel of Record)

JONES, DAY, REAVIS & PoGuE
1450 G Street, N.W.
Washington, D.C. 20005-2088
(202) 879-3939

Of Counsel: HOLLIs T. Hurp

WILLIAM T. LITTLE JONES, Day, REAVIS & PoGUE

GILPIN, PAXSON & BERSCH One Mellon Bank Center

2300 First Interstate Tower 2°00 Grant Street |

1300 Post Oak Boulevard Pittsburgh, Pennsylvania 15219
Houston, Texas 77056-3010 (412) 391-3939

(713) 623-8800 Counsel for Petitioner

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

BEST AVAILABLE COPY

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t Halifax Pa eé, 482 U.S. 1

(1987)

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ERISA 5 005, 29 U.S.C. § 1185
“RISA § 510, 29 U.S.C. § 1140
ISA $ 514, 29 U.S.C. § 1144
ISA § 514(a), 29 U.S.C. § 1144 (a)
ISA, $ 514(b), 29 U.S.C. § 1144 (b)

ISA, $ 514(c) (2), 29 U.S.C. ~ 1144(¢) (2)
Health Maintenance Organizations Act. 42 U.S.C.

‘ 300e-10

120 Cong. Rec. 29209 (1974), reprinted in 3 Legis-

é H story oF the Bn pli {@¢4 Ret remert [n-

come se rity Act of 197 4 (‘*‘Leaq slatiae His-
tory’) (Comm. Print. 1976) 4703-04

120 Cong. Rec. 29938 | 1974), reprinted in 8 Leais-

lative History 4746

120 Cong. Rec. 29935 (1974), reprinted in 3 Leqis-
ve History 4751
“0 Cong. Rec. 29942 (1974). reprinted 3 Lea
lative History 4770
120 Cong. Rec. 29949 (1974), ed in 3 Leais-
ative History 4789
120 Cong. Rec. 29951 (1974), reprinted in 3 Lea
H / L797
S. Rep. No. 3838. 98d Cor t Sess. (1973)
lL Le Hy 1 1063

na

Niat, Mandat: Sy Ra A. I) SHAN CS (", rs. Ky CN) Kn

TABLE OF AUTHO!

More Compani 8 Choosing to Self-.] e RB

N.Y. Times, August 3, 1990, at D10

ployers from Offering Coverage, 17 Pension Re

porter (BNA) No. 16, at 647 (April 16. 1990) =.

IN THE
Supreme Court of the United States

OCTOBER TERM, 1990

No. 89-1298

INGERSOLL-RAND COMPANY.
Pe titione i.

PERRY MCCLENDON.
Re sponde nt.

On Writ of Certiorari to the Supreme Court of Texas
REPLY BRIEF FOR THE PETITIONER

l. Respondent and his amici first argue (Resp. Br
11-14; Nat’l Gov. Assoc. et al. Br. 8-9; NELI ACLU Br.
3-4) that protection of employees against wrongful inter-
ference with their rights under pension plans is a tradi-
tional area of state regulation which is of no concern to
ERISA. That simply is not true. Respondent and his
amici cite no authority for their proposition except the
decision below, another very recent state court decision.
and two decisions of a single federal district court that
was interpreting the law of New York some six years
after ERISA was passed.’ The paucity and recent vin-

f

'See K Mart Corp. v. Ponsock, 732 P.2d 1364 Nev. 1987
Savodnik v. Korvettes, Inc.. 488 F-. Supp. 822 (E.D.N.Y. 1980):
Hovey v. Lutheran Medical Center. 516 F. Supp. 554 (E.D.N.Y.
1981). Though the U.S. District Court for the Eastern District

2

tage of those decisions would itself seem to refute the
claim of tradition. In any event, a pre-ERISA survey
reveals that such a state-law based claim was rejected in
the only case in which it was presented. See Annotation.
Rights and Liabilities as Between Employer and Em-
ployee With Respect to General Pension or Retirement
Plan, 42 A.L.R.2d 461, 479 (1955).

The reason why there is no tradition of state regula-
tion of wrongful interference with rights under pension
plans is precisely the reason why such regulation relates
to pension plans. There is little danger of wrongful in-
terference with employees’ rights under plans when such
rights are minima! (as, for example, when there is no
vesting). It is only when minimum standards are estab-
lished for plans (such as vesting) that the danger arises
that employers will attempt to evade those standards
through wrongful discharge or other wrongful inter-
ference. The states have had no reason to prohibit
wrongful interference with rights under pension plans
because traditionally they have not established minimum
standards for pension plans.°

It was only when Congress established minimum stand-
ards for plans in ERISA that it became necessary to es-
tablish an enforcement mechanism to assure enjoyment
of those rights free from wrongful interference. Thus,
while ERISA does not purport to regulate the entire

of New York “firmly believe[d]” (Sarodnil:, 488 F. Supp. at 825

that the courts of New York would recognize a state-law cause of
action for discharge to interfere with the attainment of a pension,
it cited no New York case so holding, nor has respondent cited any
New York case so holding, either before or after Savodnik.

* As this Court noted in Malone v. White Motor Corp., 435 U.S.
497, 507, 510-511 (1978), the legislative history of the federal]
Welfare and Pension Plans Disclosure Act of 1958 disclosed little
state regulation of pension plans up to that point. Indeed, there
was little state regulation of pension plans until a handful of
States acted just prior to ERISA, as exemplified by the Minnesota
law at issue in Malone, which was passed in April 1974,

3
employment relationship, it is vitally concerned with the
one portion of it that plainly relates to plans—where
the employer acts for the purpose of interfering with the
attainment of benefits under a plan. The employer's
purpose to interfere with the employee's rights under a
plan is the direct connection with the plan and the factor
that marks off this area of the employment relationship.’

The field of employee benefit plans therefore includes
this portion of the employment relationship, and the ef-
fort of respondent and his amici to draw a line between
the plan and the empioyment relationship (preserving
the latter for state regulation) must fail. Discharge to
interfere with attainment of benefits under a_ pension
plan is the very spot where the plan and the employment
relationship overlap.*. When an employer “makes a com-
mitment systematically to pay certain benefits” through
a plan, the obligation to refrain from discharging or
otherwise discriminating against an employee for the
purpose of interfering with the attainment of those bene-
fits under the plan is just another of the “host of obliga-
tions” undertaken in connection with the plan. Fort
Halifax Packing Co. v. Coyne, 482 U.S. 1, 9 (1987).

“ERISA pre-emption in this area is completely consistent with
the cases cited in the briefs of respondent and his amici (Resp.
Br. 21-23, 26-27; Nat'l Gov. Assoc. ef al. Br. 23; NELI/ACLU Br.
11). Those cases concerned laws addressing other areas of th em-
ployment relationship, i.e., where the state laws were not concerned
with the employer’s conduct because it had a connection with or
reference to an employee benefit plan, but rather because it Was
wrongful for reasons entirely unrelated to any plan.

‘As explained in detail in our opening brief (at 26-36). the
legislative history leaves ne doubt that Congress understood protec-
tion against wrongful interference with rights under plans to be
part of the field of emplovee benefit plans that it was pre-empting
for exclusive federal] regulation. See, e.g., 120 Cong. Ree. 29935

1974), > printed in 3 Legislative Histo, yvoof the Empl Nee Retire-

ent Tneonie Security Act of 1974 (“Legislative History’) (Comm.
Print 1976), at 4751 (remarks of Sen. Javits) (protection against

4

That Congress has pre-empted state laws which attempt
to redefine or complement this obligation is clear from
the text of Section 514. Section 514(b) specifically ex-
cepts from ERISA pre-emption state laws concerning
such traditional areas of state regulation as insurance,
banking, and securities, as well as criminal laws of gen-
eral application. See 29 U.S.C. § 1144(b). It contains
no exception, however, for state employment laws. Con-
gress did not intend to leave it to the states to decide
how to prevent employers from evading the minimum
standards of ERISA. That is a task that Congress
carried out effectively in Section 510 of ERISA and
precluded the states from undertaking in Section
514(a).®

2. Respondent and his amici err in contending next
(Resp. Br. 11-48; Nat’i Gov. Assoc. ef al. Br. 10-14;
NELI/ACLU Br. 5-9) that Section 514 (ce) (2) of ERISA
limits the class of state laws that may “relate to” a plan
ard that the Texas common law at issue here is not
within that class. Actually, Section 514(¢) (2) js not a
limitation but an extension of the term “State”.

Section 514(¢c) (2) is not, as respondent and his amici
suggest, the definition of the term “State” in ERISA.

wrongful interference with rights under plan is one of the “14
basic rights” guaranteed by ERISA, along with participation, vest-
ing, accrual, and so forth).

° As noted in our opening brief (at 14-45), with the exception
of the court below, the federal and state appellate courts that have
addressed ERISA pre-emption of state laws regulating employe:
conduct that is directly connected to the plan, by reason of the
employer’s purpose to interfere with attainment of benefits under
the plan, have uniformly agreed that such state laws are pre-
empted. To this unanimous opinion of the federal and state ap-
pellate courts has now been added the United States Department
of Labor, the agency charged with regulating (29 U.S.C. $1135),
investigating (29 U.S.C. § 1124 , and enforcing (29 U.S.C. § 1132
a)(5), th Title I of ERISA. See United States Br. 9-21].

v0

“State” is defined in Section 3(10) of ERISA as “any
State of the United States, the District of Columbia,
Puerto Rico, the Virgin Islands. American Samoa, Guam,
Wake Island, and the Canal Zone.” 29 U.S.C. £1002
(10). Section 514(¢)(2) adds to this definition of
“State” by providing that, solely for the purpose of Sec-
tion 514, the term “State” “includes a State, any politi-
cal subdivisions thereof, or any agency or instrumental-
ity of either, which purports to regulate, directly or in-
directly, the terms and conditions of employee benefit
plans covered by this subchapter.” 29 U.S.C. § 1144/e)
(2) (emphasis added). Rather than contracting the
scope of the phrase “relate[s] to,” Section 514(e) (2)
plainly extends the term “State” to reach any instru-
mentality of a state if that instrumentality is attempting
to regulate the terms and conditions of employee bene-
fit plans.

The legislative history reveals that Congress intended
to extend the term “State” so that “State professional
associations acting under the guise of State-enforced pro-
fessional regulation, should not be able to prevent unions
and employers from maintaining the types of employee
benefit programs which Congress has authorized—for
example, prepaid legal services programs—whether closed

or open panel... .”” 120 Cong. Rec. 29933 (1974), re-
printed in 3 Legislative History, at 4746 (remarks of
Sen. Williams!. But Congress understood that simply

adding instrumentalities to the definition of “State”
would have gone too far, because the phrase “relate to”
could then reach the ethical rules of state bar associa-
tions or prevent them from disciplining members with
regard to their service to pre-paid legal service plans.
See 120 Cong. Rec. 29949 (1974), reprinted in 3 Leqis-
lative History, at 4789 ‘colloquy between Sens. Taft and
Javits). Therefore, Congress limited this extension of
the term “State” to activity purporting to regulate the
terms and conditions of plans, which only confirms Con-

6

gress’s understanding that, the phrase “relate to” encom-
passes far more than regulation of the terms and condi-
tions of plans.*

In all events, respondent’s interpretation of Section
914(ce) (2) cannot be reconciled with the plain language
of Section 514(a). Any law that purports to regulate
the terms and conditions of an employee benefit plan nec-
essarily “relate[s] to” that plan. It would have been
nonsensical to provide that such laws are pre-empted only
“insofar as they may now or hereafter relate to any em-
ployee benefit plan.” 29 U.S.C. 8 1144(a). Moreover, in-
terpreting Section 514(a), this Court has repeatedly
stated that the test of pre-emption is whether the state
law “has a connection with or reference to” an ERISA-
covered plan, Shaw v. Delta Air Lines, Inc., 463 U.S. 85.
97 (1983), and has held state laws pre-empted that did
not even arguably regulate the terms and conditions of
a plan. See, e.9., Mackey v. Lanier Collection Agency &
Service, Inc., 486 U.S. 825, 829 (1988) (state law that
exempts plan from state regulation “relate|s] to” plan
and is pre-empted). Respondent’s interpretation cannot
be squared with the Court’s understanding of Section
914(a)’s language.’

* This explains the remarks of Rep. Dent quoted by amici Na-
tional Governors’ Association ef al. (Nat'l Gov. Assoc. et al. Br. 19).
Rep. Dent was referring to how ERISA pre-emption cleared away
the obstacles thrown up Dy state professional societies in the same
way as the HMO Act of i973 pre-empted rules of state professional
societies that hindered formation of HMO’s. The narrow, specific
pre-emption of listed state laws in the HMO Act (42 U.S.C. $ 300e-
10) cannot properly be compared to the sweeping pre-emption of
ERISA.

‘In addition to Mackey, respondent's position conflicts with deci-
sions of this Court in three other cases where the state law regu-
lated the administration or operation of the plan, specifically, the

manner of processing claims, rather than its terms and conditions.
Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134 (1985),

i

In order to maintain his position in light of this
Court’s prior decisions, respondent would have to depart
from the plain meaning of the word “conditions” in Sec-
tion 514(c) (2). While “conditions” plainly refers to the
conditions of eligibility for benefits under the plan, re-
spondent instead would have to read it to mean the sur-
rounding conditions within which the plan operates (a
reading that would also be inconsistent with the legis-
lative history cited above). But that understanding of
the term “conditions” applies to the Texas law at issue
here as well: the Texas law regulates the conditions
within which plans operate just as surely as the cited
decisions—by regulating one side of the triangular re-
lationship among the employer, the employee, and the
plan.®

3. Respondent and his amici also fail in their attempt
(Resp. Br. 24-27; Nat’l Gov. Assoc. et al. Br. 15-18, 24-
27; NELI/ACLU Br. 13-14) to come to grips with the
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987), and Metro-
politan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987).

Recognizing this deficiency in respondent’s argument. amici
National Governors’ Association et al. (Nat’l Gov. Assoc. et al. Br.
19-14) propose a different new test for pre-emption—whether the
state law regulates either the terms and conditions or the adminis-
tration and operation of a plan. That test cannot be derived from
any language in the Statute, least of all from respondent’s and
amici’s argument regarding Section 514(¢)(2), which, according
to respondent and his amici, limits pre-emption to state laws regu-
lating the terms and conditions of plans.

‘Congress understood that effective regulation of the field of
employee benefit plans requires regulation of all three sides of the
triangle and accomplished such regulation in ERISA: employee
versus plan (e.g., vesting requirements), employer versus plan
(e.g., funding requirements), and employer versus employee (e.9.,
protection against wrongful interference with rights under plan).
Respondent and his amici admit that state laws regulating the
first two sides of the triangle relate to employee benefit plans and
‘ire preempt d (Resp. Br. 20-21: Nat’] Gov. Assoc. et al. Br. 14,
n.6); they cannot explain why Congress would have failed to pro-
vide pre-emption cf state laws regulating the third side.

O_O

8

structure and legislative history of ERISA. They have
no response to the obvious conclusion that Section 510 of
ERISA demonstrates the understanding of Congress that
non-interference laws “relate to” plans (and, indeed, are
vital to the effective regulation of plans).

Faced with the fact that the Texas law treats a sub-
ject that is treated by ERISA, respondent and his amici
are forced to argue that Congress intended to allow the
states to treat some of the subjects treated by ERISA.
They base this argument on the fact that Congress re-
jected a pre-emption provision that was limited to state
laws treating the same subjects as ERISA. As explained
in detail in our opening brief (at 26-36) and in this
Court’s opinion in Shaw v. Delta Air Lines, Inc., 463
U.S. at 98, however, from the beginning of its considera-
tion of ERISA, Congress was unwavering in its inten-
tion to pre-empt state laws treating the same subjects
as ERISA. When, in conference committee, Congress re-
placed the “same subject” formulation with the “relate
to” formulation, it did so only to broaden, not to con-
tract, the scope of ERISA pre-emption.

As for this Court’s conclusion (Pilot Life Ins. Co. v.
Dedeauxz, 481 U.S. 41, 54 (1987)) that ERISA’s compre-
hensive civil enforcement mechanism is exclusive, re-
spondent and his amici argue that the exclusive force of
ERISA Section 502 is limited to claims for benefits un-
der Section 502(a) (1) (B). However, since violations of
Section 510 are remedied by an action under Section
502(a) (3), their position would require the Court to
hold that one subparagraph of Section 502(a) provides
exclusive remedies and one does not—a distinction that
would be out of step with the Court’s previous holding
that “(t]he deliberate care with which ERISA’s civil
enforcement remedies were drafted and the#balancing of
policies embodied in its choice of remedies argue strongly
for the conclusion that ERISA’s civil enforcement reme-
dies were intended to be exclusive.” Jd.

9

Nor does this Court’s recent decision in English v,
General Electric Co., 110 S. Ct. 2270 (1990), offer re-
spondent any comfort. In English, the Court’s analysis
was not guided by “explicit statutory language” ( id. at
2275) commanding pre-emption: the Court specifically
distinguished ERISA as an example of a federal statute
that does explicitly define the extent of pre-emption
(ibid.). The Court in English found the argument for
pre-emption unpersuasive because it would have resulted
In pre-emption of state criminal laws of general applica-
tion; ERISA contains an express exception preserving
state criminal laws of general application (29 U.S.C.
$ 1144(b) (4)). The state law in that case had a differ-
ent purpose from the federal law; here, the state law
not only has the same purpose as the federal law ( pro-
tecting employees’ interests in pension plans), but is
designed to enforce exclusively federal standards for
plans. This Court had previously found that the fed-
eral scheme at issue in English was to be supplemented
by state tort remedies: the Court has previously found
that ERISA does not permit state tort remedies (Pilot
Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987)). The
whistleblower remedy at issue in English was created 24
years after Congress occupied the field in the Atomic
Energy Act; Sections 902, 510 and 514 of ERISA were
developed and enacted together as a carefully integrated
and exclusive scheme. And, in English, the Court ex-
pressly distinguished the comprehensive pre-emptive
force of the National Labor Relations Act; ERISA pre-
on og is modeled on that Act (Pilot Life, 481 U.S. at

-56).°

*It should also be noted that English was not a wrongful dis-
charge case; the wrongful discharge claim was rejected by the
district court and not appealed (110 S. Ct. at 2274 n.4). In this
Court, English claimed only that the employer’s conduct prior to
the discharge was outrageous and remediable under the state tort
law (id. at 2274-2275). Thus, unlike this case, the employer’s
conduct was actionable under State law for an entirely different
reason from why it might have been actionable under federal law.

10

4. As for the policy of ERISA, respondent and his
amici err (Resp. Br. 24-29; Nat’! Gov. Assoc. et al. Br.
“18-24; NELI/ACLU Br. 12-13) in citing the Fort Hali-
fax case for the proposition that the purposes of ERISA
(and ERISA pre-emption) are limited to promoting uni-
formity in the administrative practices of plans. In
Fort Halifax, this Court focused on the question of ad-
ministrative practices, not to determine whether the state
law “relate[d] to’ a plan, but whether there was a
“plan” to which the state law related. The Court. held
that a “plan” does not exist in the absence of administra-
tive machinery: thus, the Maine law in that case did not
relate to a “plan” because it did not affect any on-going
administrative machinery or call such an administrative
machine into being. 482 U.S. at 12-13. The Court did
not hold that where, as in this case, there is indisputably
an ERISA-covered plan, a state law “relate{s] to” the
plan only if it affects the administrative practices of the
plan.

Respondent’s argument ultimately overlooks the fact
that the most fundamental purpose of ERISA, from
which all of its provisions spring, is to “promote the in-
terests of employees and their beneficiaries in employee
benefit plans.” Shaw v. Delta Air Lines, Inc., 463 US.
at 90. ERISA promotes the interests of employees in
their plans in a variety of ways, of which regulation of
the administrative practices of plans is just one. No
less important than any other way is assuring that em-
ployees enjoy their rights under their plans free from
wrongful interference by the employer.” In attempting
to do the same, the Texas law directly implicates the pur-
poses of ERISA.

*” Other ways include: assuring that all plans meet minimum
standards for participation, vesting, accrual, etc. (Part 2 of Title
I of ERISA); assuring that employers make adequate contribu-
tions to plans (Part 3 of Title I); assuring that the assets of plans
are properly invested (Part 4 of Title I); and guaranteeing bene-
fits when plans terminate with insufficient assets (Title IV).

11

Indeed, the Texas law threatens to defeat the pur-
poses of ERISA. When considering ERISA, Congress
understood that rules which appear on their face to
promote the interests of employees could, if too severe,
ironically work against the purpose of promoting em-
ployees’ interests in their plans by discouraging employ-
ers from establishing or continuing plans. See, €.g., S.
Rep. No. 383, 93d Cong., Ist Sess. 19 (1973), reprinted
in 1 Legislative History, at 1063, 1087; 120 Cong. Rec.
29209 (1974), reprinted in 3 Legislative History, at
4703-4704 (remarks of Rep. Collier); 120 Cong. Rec.
29951 (1974), reprinted in 3 Legislative History, at
4797 (remarks of Sen. Bentsen) ; see also Shaw v. Delta
Air Lines, Inc., 463 U.S. at 96-100, 104-106; Fort Hali-
fax Packing Co. v. Coyne, 482 U.S. at 10. State-law
based causes of action for wrongful interference with
the attainment of rights under a plan—imposing poten-
tially different substantive standards of conduct, with
different procedural and proof requirements, as well as
possible jury trials and punitive damages—are just such
types of state laws. They would upset the balance that
Congress struck and work against the congressional pur-
pose of promoting employees’ interests in plans.

To appreciate the threat, one need only look to an area
where Congress did not pre-empt state laws—state reg-
ulation of the content of insurance policies purchased by
insured health plans. In this area, state regulation has
had a dramatic effect on employee benefit plans—a mas-
sive nationwide shift from insured plans to self-insured
plans (or, in some instances, to abandonment of plans)
in order to avoid varying state insurance laws.’ In the

‘1A national survey of employers under the auspices of the
Health Insurance Institute of America in 1988 documented the
dramatic shift from insured to self-insured plans since ERISA.
It concluded that, whereas 5 percent of employees were enrolled in
self-insured health plans in 1975, over 60 percent were enrolled in
self-insured plans in 1987, and the principal explanation was the
desire to avoid varying state insurance laws. Gabel, Jajich-Toth,

12

Same way, as noted in our opening brief (at 39-40), the
threat of state court actions, tried to a jury, with puni-
tive damages, would create a strong disincentive to estab-
lish or continue pension plans. Even if an employer es-
tablished or continued a plan, there would be strong pres-
sure to alter the vesting rules in the plan to minimize
the risk of lawsuits—either delaying vesting for as long
as possible or avoiding the problem by providing full and
immediate vesting. And, where an employer operates in
more than one state, varying state law requirements
would push the employer toward breaking up the plan
into separate pieces or reducing the plan to the lowest
common denominator—a Hobson’s choice that ERISA
pre-emption was specifically designed to avoid. See Alessi
v. Raybestos-Manhattan, Inc., 451 U.S. 504, 514, 524-
525 (1981).

In any event, respondent’s casual doubt about the
magnitude of the threat is beside the point. Congress
employed blanket pre-emption in Section 514(a) in or-
der to avoid any balancing tests—to avoid “endless liti-
gation over the validity of State action that might im-

a

de Lissovoy, Rice & Cohen, The Changing World of Group Health
Insurance, 7 Health Affairs 48, 58-59 (1988).

See also More Companies Choosing to Self-Insure Benefits, N.Y.
Times, August 3, 1990, at D10 (“51 percent of the firms that
converted to self-insurance from 1981 to 1984 would not have done
so if there were no state-mandated benefits.”); Laws on Health
Benefits Raise Firms’ Ire, Wall St. J., December 28, 1988, at Bl
(“To avoid the added insurance costs, many large companies are
adopting self-insurance plans, which are exempt from the mandate
laws. And because only those companies that offer health plans
are obliged to offer the benefits imposed by the mandates, some
concerns have decided not to offer insurance plans at all.”); State
Mandates Raise Insurance Costs, Keep Employers from Offering
Coverage, 17 Pension Reporter (BNA) No. 16, at 647 (April 16,
1990) (“Research on the effect of State mandates on employer-
sponsored health insurance coverage has shown that mandates
increase costs and discourage some employers from sponsoring
health coverage for workers... .” 3

13

pinge on Federal regulation” (120 Cong. Rec. 29942
(1974), reprinted in 3 Legislative History, at 4770 (re-
marks of Sen. Javits) ).

5. Finally, there is no basis to respondent’s contention
(Resp. Br. 30) that petitioner cannot raise the ERISA
pre-emption defense in this case. This Court has long
held that, where the highest court of a state has actually
passed on a federal question, any inquiry into how or
when the question was raised in the state courts in irrel-
evant to the exercise of the Court’s jurisdiction. See
Charleston Federal Savings & Loan Ass’n v. Alderson,
324 U.S. 182, 185-186 (1945); see also Orr v. Orr, 440
U.S. 268, 274-275 (1979) ; Raley v. Ohio, 360 U.S. 423,
436-437 (1959). The Supreme Court of Texas passed on
petitioner’s ERISA pre-emption defense, and this Court’s
review of that decision is therefore entirely appropriate.

For these reasons, as well as those set forth in our
opening brief, the judgment of the court below should be
reversed and remanded.

Respectfully submitted,

GLEN D. NAGER

(Counsel of Record)
JONES, Day, REAVIs & PoGuE
1450 G Street, N.W.
Washington, D.C. 20005-2088
(202) 879-3939

Of Counsel: HOLuis T. Hurp
WILLIAM T. LITTLE JONES, DAY, REAVIs & PoquE

GILPIN, PAXSON & BERscH One Mellon Bank Center

2300 First Interstate Tower 500 Grant Street .
1300 Post Oak Boulevard Pittsburgh, Pennsylvania 15219

Houston, Texas 77056-3010 (412) 391-3939
(713) 623-8800 Counsel for Petitioner

August 1990

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0720%3A10. Public record. Not legal advice.
