# Amicus Curiae Brief — Ingersoll-Rand Co. v. McClendon > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0720%3A17 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1990 - **Citation:** 498 U.S. 133 ## Text wet | Supreme Coutt, U.S. FILED ab’, JUL 19 1990 ‘bea JR. No. 89-1298 — - Inu The Supreme Court Of Che United States OCTOBER TERM, 1990 INGERSOLL-RAND COMPANY, Petitioner, Vv. PERRY McCLENDON, Respondent. ON WRIT OF CERTIORARI TO THE SUPREME COURT OF TEXAS BRIEF AMICUS CURIAE OF THE NATIONAL EMPLOYMENT LAWYERS ASSOCIATION AND AMERICAN CIVIL LIBERTIES UNION IN SUPPORT OF RESPONDENT Counsel for Amici Curiae: Of Counsel: JANET BOND ARTERTON* JEFFREY LEWIS MARKUS L. PENZEL SIGMAN & LEWIS GARRISON, SILBERT AND 436 14th Street ARTERTON, PC. Suite 1020 405 Orange Street Oakland, California 94612 New Haven, Connecticut 06511 (415) 839-6824 (203) 777-4425 *Counsel of Record BEST AVAILABLE COPY Printed by Brescia's Printing Services, Inc. 66 Connecticut Boulevard East Hartford, CT 06108 528-4254 TABLE OF CONTENTS Page TABLE OF AUTHORITIES .. il INTEREST OF THE AMICI CURIAE l STATEMENT OF THE CASE l ISSUE ..... 1 SUMMARY OF ARGUMENT . 2 ARGUMENT ...... eee 3 I. Absent A Clear And Unmistakable Congressional Intent To Preempt State Law, A Federal Statute May Not Eviscerate State Remedies For Wrongful Termination Of The Employment Relationship 3 Il. The Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seg., Preempts Only Those State Laws That Both Relate To Employee Benefit Plans And Purport To Regulate, Directly Or Indirectly, The Terms And Conditions Of Teese Pieme............ een sean 5 III. ERISA Does Not Preempt A State Common Law That Prohibits An Employer From Dis- charging An Employee In Order To Avoid Contributing To Or Paying Benefits Under The Employee's Pension Fund . 10 IV. That The Facts Of This Case May Have Also Provided Respondent With A Cause Of Action Under Section 510 Of ERISA Is Insufficient To Support A Finding Of Preemption 13 CONCLUSION 15 TABLE OF AUTHORITIES Cases: Page(s) Alessi v. Raybestos-Manhattan, Inc., 451 U.S. DP 2 cu ese ea eve wea wee eae 3, 4, 6, 8, 14 Amato v. Western Union International, Inc., 773 F.2d 1402 (2d Cir. 1985), cert. dismissed, 474 U.S. 1113 IS sc cota A ene ee ee og uate ce oath oo Belknap v. Hale, 463 U.S. 491 (1983) ................ 3 California v. ARC America Corp., __ U.S. __, 109 a I ES «os oe uu ou caesar es ae City of Burbank v. Lockheed Air Terminal, Inc., 411 ee PI so ooo. 00-50 Sere te Nees 3 Decanas v. Bica, 424 U.S. 351 (1976) ......... er Dzinglski v. Weirton Steel Corp., 875 F.2d 1075 (4th Cir.), cert. denied, 110 S.Ct. 281 (1989)... ... Mee English v. General Electric Company, __ US. _, 58 U.S.LW. 4679 (1990)... . . 3, 4, 5, 13, 14 Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 Preparer art, ewe nha doy teed _. passim Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1 (1983) ........ 2 ra ag Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707 (1985).......... 14 Hlinka v. Bethlehem Steel Corp., 863 F.2d 279 (3d Cir. Es oo 4 4k a seco cen banuhioeeeereoaoree 11 Jones v. Rath Packing Co., 430 U.S. 519 (1977) ........ 4 TABLE OF AUTHORITIES (continued) Cases: Page(s) K Mart Corp. v. Ponsock, 732 P.2d 1364 (Nev. 1987)... 10 Lingle v. Norge Division of Magic Chef, Inc., 486 ee I. a 5 9 6 cd Kd we eco eae 10, 11 Linn v. Plant Guard Workers, 383 U.S. 53 (i966) ...._.. 3 Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825 (1988) .............. 9, 12, 13, 14 Martori Bros. Distributors v. James-Massengale, 781 F.2d 1349 (9th Cir.), cert. denied, 479 U.S. 949 I ase a Ga kf care aa OR eee ae ee 6, 11 Maryland v. Louisiana, 451 U.S. 725 (1981)... ee Massachusetts v. Moradch, __ U.S. _, 109 S.Ct. 1668 ne ear ae a a re ee ete 3 Massachusetts Mutual Life Insurance Co. v. Russell, Se ey rE I ss ores 0s 0h kek ees ere McLendon v. Ingersoll-Rand Co., 779 SW.2d 69 IN do ac bcd s s os. ve see sa oe ce ee: Metropolitan Life Insurance Co. v. Massachusetts, ie ee eee | 6, 7 Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58 (1987), on remand sub. nom. Taylor v. General Motors Corp., 826 F.2d 452 (6th Cir. 1987) __. 8,9 Morningstar v. Meijer, Inc., 662 F.Supp. 555 (E.D. Mich. 1987) rap Both Taylor, supra at 66, and Dedeaux, supra at 52-55, also arguably Suggest in dicta that any state law claim that could be recharacterized as falling within the scope of § 502(a) is preempted. In these cases, however, the common law claims preempted fell within the scope of § 502(a)(1)(B). Therefore, only consideration of the preemptive force of § 502(a)(1)(B) was necessary to the decision of those cases, as any claim within the scope of that subsection necessarily “purports to regulate’ an ERISA plan. In fact, the legislative history on which both Taylor and Dedeaux relied to find a clear manifestation of preemptive intent applies only to claims within the scope of § 502(a)(1)(B). Taylor at 65-66; Dedeaux at 55 (citing H.R. Conf. Rep. No. 93-1280, p. 327 (1974)). Any broadening of this line of analysis to causes of action other than those within the scope of § 502(a)(1)(B) should take place only if it is consistent with the “purports to regulate’ language of § 514(c) and otherwise furthers the purpose of ERISA preemption as described in Ft. Halifax, supra. Because Respon- dent's claim does not fall within the scope of § 502(a)(1)(B), the clear and manifest legislative intent necessary to support a finding of preemption does not exist. III. ERISA Does Not Preempt A State Common Law That Prohibits An Employer From Discharging An Employee In Order To Avoid Contributing To Or Paying Benefits Under The Employee’s Pension Fund. Applying this standard to the Texas law under attack by Petitioner, it becomes clear that because the law does not purport to regulate an ERISA Plan, it is not a ‘State law”’ preempted by Section 514. Far from regulating any terms and conditions of Petitioner's pensicn fund, the law attempts instead to regulate the employer-employee relationship, an area ‘‘within the traditional police power of the State.” F't. Halifax Packing Co., supra, 482 U.S. at 21. Under the Texas law, a terminated employee will be allowed recovery when he proves that ‘‘the principal reason for his termination was the employer's desire to avoid contributing to or paying bene- fits under the employee’s pension fund.’ McLendon uv. Ingersoll-Rand Co., 779 SW.2d 69, 71 (Tex. 1989). The focus of the employee's claim, therefore, will be the employer's intent in severing the employment relationship. An inquiry into this intent can hardly be said to regulate, either directly or indirectly, the terms and conditions of an ERISA plan.* See, e.g., K Mart Corp. v. Ponsock, 732 P.2d 1364 (Nev. 1987) (award of extracontractual damages for bad faith discharge of employee to avoid payment of retirement benefits). The decision to terminate an employee does not impli- cate any fiduciary duties under ERISA. Cf, Amato v. Western * While Petitioner's pension plan may contain information, such as a vesting schedule, that may provide circumstantial evidence of the employer's intent, this fact alone does not involve the regulation, direct or indirect, of the plan, and would be insufficient to trigger preemption. Cf. Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 413 n.12 (1988) (‘although federal law would govern the interpretation of [a collec- tive bargaining] agreement to determine the proper damages, the under- lying state-law claim, not otherwise pre-empted, would stand.’). Moreover, that Petitioner may have ultimately allowed Respondent's pension Lo vest only underscores the fact that his cause of action does not purport to regu- late the terms and conditions of the plan. 10 Union International, Inc., 773 F.2d 1402, 1416 (2d Cir. 1985), cert. dismissed, 474 U.S. 1113 (1986) (‘ERISA permits employers to wear ‘two hats, and [ | they assume fiduciary status ‘only when and to the extent’ that they function in their capacity as plan administrators... "'); see also, Dzinglski v. Weirton Steel Corp., 875 F.2d 1075, 1078-9 (4th Cir.), cert. denied, 110 S.Ct. 281 (1989); Hlinka v. Bethlehem Steel Corp., 863 F.2d 279, 285 (3d Cir. 1988). Since Section 3(21)(A), 29 U.S.C. Section 1002 (21)(A), defines a fiduciary in part as one who has any discretionary authority or con- trol regarding the management or administration of a benefit plan, the termination of an employee, and an inquiry into the reasons for the termination, do not and will not affect the management or administration of the plan. Nor, as Petitioner concedes (Pet. Brief at 46 n.12), will the calculation of Respondent's damages, including his lost benefits, if any, interfere in the regulation of the plan. Because the loss of benefits from any wrongful termination, regard- less of motive, is nothing more than a consequence of the ter- mination and does not therefore ‘‘relate to’’ the underlying plan, the fact that lost benefits are included as an element of damages to make the employee whole does not trigger preemption. See, Teper v. Park West Galleries, Inc., 427 N.W. 2d 535 (Mich. 1988); Martori Bros. Distributors v. James- Massengale, 781 F.2d 1349, 1358 (1986) (cited with approval in Fort Halifax, supra, 482 U.S. at 12 n.6); Morningstar v. Meijer, Inc., 662 F.Supp. 555 (E.D. Mich. 1987); Totton v. New York Life Insurance Co., 685 F.Supp. 27 (D. Conn. 1988); cf, Lingle v. Norge Division of Magic Chef, Inc., supra, 486 U.S. at 413 n.12. To hold otherwise would preempt every wrongful termination action, regardless of the underlying public policy supporting it, in which the employee claimed lost benefits as an element of damages. There is simply no evidence of a Congressional intent, let alone clear, manifest, and unmistak- 11 able evidence, to support such a sweeping application of the preemption clause.” Finally, in the highly speculative event that the Texas law might, by the circuitous process envisioned by Petitioner (Pet. Brief at 36-41), affect Petitioner's plan, these effects are no less tenuous, remote, and peripheral than those rejected by the Court in Mackey v. Lanier Collection Agency & Ser- vice, Inc., 486 U.S. 825 (1988). There, the majority was appar- ently unpersuaded by the dissent’s claim that ‘‘[clompliance with the state garnishment procedures subjects the plan to significant administrative burdens and costs.” Jd. at 842. It is particularly significant that the majority reached its con- clusion without quarreling with the dissent’s claim that: Petitioners are required to confirm the identify of each of the 22 plan participants who owe money to respondent, calculate the participant’s maximum entitlernent from the fund for the period between the service date and the reply date of the summons of garnishment, determine the amount that each par- ticipant owes to respondent, and make payments into state court of the lesser of the amount owed to respondent and the participant’s entitlement. Peti- tioners must also make decisions concerning the validity and priority of garnishments and, if neces- sary, bear the costs of litigating these issues. Fur- ther, as trustees of a multiemployer plan covering participants in several States, petitioners are poten- tially subject to multiple garnishment orders under varying or conflicting state laws. It is apparent that these effects of garnishment laws on employee benefit plans are not tenuous, remote, or peripheral, and that such laws are accordingly pre-empted. ° To the extent that Respondent sought lost benefits in a lump sum from his employer as an element of damages, Amici disagree with footnove 3 of the Texas Supreme Court's opinion. That an employee has sought lost benefits in a lump sum as an element of damages shouid have no bearing on the preemption analysis for the reasons stated above. 12 /d.1f anything, the burdens and costs hypothesized by Peti- tioner are less severe than those feared by the dissent in Mackey. Moreover, Petitioner's speculation is no substitute for the clear, manifest, and unmistakable showing required to meet its burden of proof. Accordingly, preemption would in no way address the concerns of ERISA’s preemption pro- a and ERISA does not preempt Respondent's state law claim. IV. That The Facts Of This Case May Have Also Provided Respondent With A Cause Of Action Under Section 510 Of ERISA Is Insufficient To Support A Finding Of Preemption. Section 510 of ERISA, 29 U.S.C. § 1140, makes it unlawful *‘for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the pro- visions of an employee benefit plan... . or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan... "’ Sec- tion 502(e)(1), 29 U.S.C. § 1132(e)(1), gives the federal courts exclusive jurisdiction over Section 510 claims. Respondent may very well have been able to state a claim under Section 510. Nonetheless, this possibility provides no basis for the conclusion that his state law claim is preempted by ERISA. Any conclusion that Sections 510 and 502(e) together preempt the Texas law would have to rest on an analysis that Congress has not only expressly preempted the field of pension plan regulation, but that it has also implicitly preempted a field of wrongful termination law. This analysis, however, is precluded by Section 514’s express preemption provision. See, English v. General Electric Company, __ U.S. —, 58 US.L.W. 4679, 4681 (1990) (‘in the absence of explicit statutory language, state law is pre-empted where it regu- lates conduct in a field that Congress intended the Federal Government to occupy exclusively. ') (emphasis added); Cal- ifornia v. ARC America Corp., 109 S.Ct. 1661, 1665 (19839). 13 Moreover, ERiSA has been described as ‘‘a ‘comprehen- sive and reticulated statute, which Congress adopted after careful study of private retirement pension plans.” Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 511 (1981) (quoting Nachman Corp. v. Pension Benefit Guaranty Corp., 446 U.S. 359, 361 (1980)). Because the express language of Section 514 cannot be read to preempt Texas law, in ‘‘a comprehensive regulatory scheme like ERISA, such omissions are signifi- cant ones.’ Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 837 (1988). Cf. Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 147 (1985). Finally, no conflict exists between the Texas law and Sec- tion 510. “[O}rdinarily, state causes of ac... are not preempted solely because they impose liability over and above that authorized by federal law.’ English v. General Electric Co., supra, 58 U.S.L.W. at 4684 (quoting California v. ARC America Corp., 109 S.Ct. 1661, 1667 (1989)). While “every sub- ject that merits congressional legislation is, by definition, a subject of national concern . . . [, this] cannot mean, however, that every federal statute ousts all related statelaw..s”’ Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 719 (1985). In Decanas v. Bica, 424 U.S. 351, 356 (1976), this Court recognized that ‘‘states possess broad authority .. . to regulate the employment relation- ship to protect workers within the State.’ Preempting the ‘Texas law, where Congress has declined to provide for it within an express preemption clause, would frustrate this principle and needlessly impair the state's ability to protect the employer-employee relationship. 14 CONCLUSION Wherefore, Amici respectfully urge this Court to affirm the judgment below. Counsel for Amici Curiae: Of Counsel: JANET BOND ARTERTON* JEFFREY LEWIS MARKUS L. PENZEL SIGMAN & LEWIS GARRISON, SILBERT AND 436 14th Street ARTERTON, PC. Suite 1020 405 Orange Street Oakland, California 94612 New Haven, Connecticut 06511 (415) 839-6824 (203) 777-4425 *Counsel of Record Juiy 1990 15 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0720%3A17. Public record. Not legal advice.