Amicus Curiae Brief — Egelhoff v. Egelhoff

In The

Supreme Court of the United States

o

DONNA RAE EGELHOFF,

Petitioner,

Vv.

SAMANTHA EGELHOFF, a Minor, by and

through her Natural Parent KATE BREINER,

and DAVID EGELHOFF,

Respondents.

>

On Writ Of Certiorari To The

Supreme Court Of Washington

.

BRIEF OF AMICI CURIAE, THE BOEING COMPANY,

THE NATIONAL ASSOCIATION OF

MANUFACTURERS AND THE CHAMBER OF

COMMERCE OF THE UNITED STATES, IN

SUPPORT OF PETITIONER

®

Bruce D. Corker

Counsel of Record

Kurt E. LinsENMAYER

Perkins Cole LLP

1201 Third Avenue

Suite 4800

Seattle, WA 98101-3099

(206) 583-8888

Counsel for Amici Curiae

[Of Counsel Listed on Inside Cover]

Of Counsel:

Paut J. EHLENBACH

Assistant General Counsel

Loretta B. Kepcer

Counsel

The Boeing Company

P.O. Box 3707 MC 13-08

Seattle, WA 98124-2707

(206) 655-6000

Of Counsel:

STePHEN A. BoxKaT

Executive Vice President and Counsel

National Chamber Litigation Center, Inc.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

Of Counsel:

JAN AMUNDSON

General Counsel

QUENTIN RIEGEL

Deputy General Counsel

National Association of Manufacturers

1331 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-1790

(202) 637-3000

TABLE OF CONTENTS

Page

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

SUMMARY OF ARGUMENT....................... 3

CeCe ee eesesbbecceosnccocccecceeeses 4

I. ERISA PREEMPTS REVISED CODE OF

WASHINGTON § 11.07.0100 BECAUSE

COMPLIANCE WITH THIS AND SIMILAR

STATE LAWS WOULD FRUSTRATE A

FUNDAMENTAL PURPOSE OF ERISA ........ 4

A. Under ERISA, the Terms of a Pension or

Welfare Plan Govern Beneficiary Status.... 5

B. A Patchwork of State Regulation Would

Impose Unnecessary Administrative

Burdens on ERISA Plans.................. 7

Il. PLAN ADMINISTRATORS SHOULD BE ABLE

TO RELY SOLELY ON THE GOVERNING PLAN

DOCUMENTS IN DETERMINING ERISA PLAN

teeter sesh eeseceesceececececess 16

EE EEEL SLES ETE OTOP ETETTETET TET 18

TABLE OF AUTHORITIES

Page

Cases

Aetna Life Ins. Co. v. Wadsworth, 102 Wn.2d 652,

GED FS GS CRTBD ccc ccccveccccvccccessccccsescoes 9

Boggs v. Boggs, 520 U.S. 833 (1997)... 2.0.6.6 e eee eee 4

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987)

ceceuneenseteversesconessoueasbsoweussesenenes 5, 8, 18

Fox Valley & Vicinity Constr. Workers Pension Fund

v. Brown, 897 F.2d 275 (7th Cir. 1990)............. 17

Hill v. AT&T Corp., 125 F.3d 646 (8th Cir. 1997)

sobbcesusedcenceseneseancneeseenhesedennenal 14, 15, 17

Ingersoll-Rand Co. v. McClendon, 498 U.S. 133

BEUOED cocccccvccccececvececessscntenseneseeereseees 5

John Hancock Mut. Life Ins. Co. v. Harris Trust &

Sav. Bank, 510 U.S. 86 (1993)........-.. cece eeeees 4

Lyman Lumber Co. v. Hill, 877 F.2d 692 (8th Cir.

Fea v cncsecccccessvccncsendceecnnsenuseeteanecae 17

Manning v. Hayes, 212 F.3d 866 (5th Cir. 2000). ...16, 17

Metropolitan Life Ins. Co. v. Marsh, 119 F.3d 415 (6th

Eek We ccccueseuecenpnevesnsacdcsensesabssueuaentes 6

Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984) ..... 4

STATUTES

Employee Retirement Income Security Act of

1974, 29 U.S.C. §§ 1001-1461.................. passim

TP BEG B TD cccccenccvcccescessecscecesecsencs 4

EM PPP 6, 17

SP COE. 6 CMI, oc ocdscccddccntsssssntent 5

TABLE OF AUTHORITIES - Continued

Page

Se Seis OF Ss tenndadssducnncebesdidasencunal 6

Ariz. Rev. Stat. ANN. § 14-2804.................... 9, 10

Mont. Cove ANN. § 72-2-814 ................000ee. 9, 10

Ses GE Or Sc ondednciucdasddnenecesueanand 9, 10

as ee A SS I dnvedtkodcdcdodsioccaudne 9, 11

Wasn. Rev. Cove § 11.07.010 ................205. passim

—

INTEREST OF AMICI CURIAE!

The Boeing Company (“Boeing”) is an aerospace

company that employs approximately 173,000 persons in

business operations located in 45 states. Boeing sponsors

various pension plans and welfare benefit plans that are

subject to the provisions of the Employee Retirement

Income Security Act of 1974, 29 U.S.C. §§ 1001-1461

(“ERISA”), and that provide benefits to Boeing

employees. Through a delegation of authority from

Boeing, a committee comprised of Boeing employees acts

as the administrator of Boeing’s ERISA plans. Boeing is

the sponsor of the pension plan and of the life insurance

plans that provided the employee benefits at issue in this

case.

The National Association of Manufacturers (the

“NAM”) is the nation’s oldest and largest broad-based

industrial trade association. The NAM represents 14,000

members (including 10,000 small and mid-sized

companies) and 350 member associations serving

manufacturers and employees in every industrial sector

and all 50 states. The NAM’s mission is to enhance the

competitiveness of manufacturers and to improve

American living standards by shaping a legislative and

regulatory environment conducive to U.S. economic

! Counsel for a party did not author this brief in whole or in

part. No one, other than the amici curiae or their counsel, made a

monetary contribution to the preparation or submission of this

brief. Boeing has provided Petitioner Donna Rae Egelhoff with

financial support in connection with her brief on the merits.

Counsel for the parties have issued blanket consents for the

filing of amicus briefs.

growth and to increase understanding about the

importance of manufacturing to America’s economic

strength.

The Chamber of Commerce of the United States of

America (the “Chamber”) is the world’s largest business

federation. The Chamber has substantial membership in

each of the 50 states, and through its federation of

members represents more than 3,000,000 businesses and

professional organizations of every size and in every

sector of the economy. More than 95% are small

businesses with 100 or fewer employees, and virtually all

the nation’s largest companies are also members of the

Chamber. The Chamber thus serves as a principal voice of

American business.

Boeing, the NAM and the Chamber submit this brief

to express the viewpoints of employers and ERISA plan

administrators? in connection with purported State

regulation of beneficiary designations. This brief will

address the unnecessary burdens and costs that such a

patchwork of State regulation would impose on the

beneficiary designation administration of ERISA-

governed employee benefit plans. In addition, Boeing, the

NAM and the Chamber are concerned that an unduly

narrow application of ERISA preemption will, contrary to

Congress's express intent in regulating employee benefit

plans under a uniform national law, force employers to

direct an increasingly greater amount of resources toward

plan administration and litigation for resolving benefits

2 Employers that sponsor ERISA plans typically act as, or

have authority over, the administrators of such plans.

entitlement under the laws of the 50 States, with fewer

resources available for providing actual benefits.

4

SUMMARY OF ARGUMENT

If the Washington Supreme Court's decision below is

allowed to stand, it will defeat the purposes of ERISA, it

will impose real and substantial burdens on plan

sponsors and administrators, thereby jeopardizing the

future of many employer-sponsored pension and welfare

plans, and it will hinder the ability of participants,

beneficiaries and their advisors to make informed

decisions about beneficiary status and rights. By

expressly incorporating a preemption provision into the

ERISA statute, Congress intended to avoid these

outcomes.

ERISA preempts Revised Code of Washington

§ 11.07.010 because the Washington law, which in effect

automatically revokes a spousal beneficiary designation

upon divorce, conflicts with ERISA’s substantive

provisions and operates to frustrate ERISA’s purpose.

Preemption in this instance will serve to avoid State-by-

State regulation of ERISA plan beneficiary designations

and to prevent the type of administrative burden on

ERISA plans that Congress has sought to avoid.

Boeing, the NAM and the Chamber ask the Court to

confirm the uniform national law that ERISA plans

should apply in making their beneficiary payment

decisions. In this way, the Court can resolve the existing

confusion, especially for employers with operations in

multiple States. The Court should adopt the standard

already in place under ERISA, which standard provides

that an ERISA plan beneficiary is determined solely by

the governing plan documents.

*

ARGUMENT

I. ERISA PREEMPTS REVISED CODE OF

WASHINGTON § 11.07.010 BECAUSE

COMPLIANCE WITH THIS AND SIMILAR STATE

LAWS WOULD FRUSTRATE A FUNDAMENTAL

PURPOSE OF ERISA.

The Court has previously enunciated the standard for

ERISA preemption that is applicable to this case: a State

law is preempted by ERISA if the State law “conflicts

with the provisions of ERISA or operates to frustrate its

objects.” Boggs v. Boggs, 520 U.S. 833, 841 (1997).

Likewise, where the “ ‘law stands as an obstacle to the

accomplishment of the full purposes and objectives of

Congress,’ federal preemption occurs.” John Hancock Mut.

Life Ins. Co. v. Harris Trust & Sav. Bank, 510 U.S. 86, 99

(1993) (quoting Silkwood v. Kerr-McGee Corp., 464 U.S. 238,

248 (1984)).

ERISA was enacted to protect the interests of

employees and beneficiaries in employer-provided benefit

plans. 29 U.S.C. § 1001(a). The safeguards contained in

ERISA amount to formal obligations for the establishment,

operation and administration of such plans. Id. Through

ERISA’s preemption clause, Congress sought a careful

balance of the burdens created by the statute:

Section 514(a) [ERISA’s preemption clause] was

intended to ensure that plans and plan sponsors

would be subject to a uniform body of benefits

law; the goal was to minimize the administrative

and financial burden of complying with

conflicting directives among States or between

States and the Federal Government. Otherwise,

the inefficiencies created could work to the

detriment of plan beneficiaries.

Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142 (1990).

Congress wished to avoid

[a] patch-work scheme of regulation [that]

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.

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

As the Court has thus recognized, a fundamental

purpose of ERISA was to create a uniform national law for

the efficient administration of employer-sponsored benefit

plans. A uniform national law currently exists under

ERISA for designating the beneficiary who is entitled to a

participant’s death benefit. In stark contrast, the

patchwork of State regulation contemplated by the

Washington Supreme Court's decision below would create

precisely the type of administrative inefficiencies that

would frustrate ERISA’s uniform national law purpose.

A. Under ERISA, the Terms of a Pension or

Welfare Plan Govern Beneficiary Status.

An ERISA pension plan, or an ERISA welfare plan

that provides a death benefit, must set forth the

beneficiary designation provisions that direct the

payment of a death benefit. This payment scheme is

essential to the operation of such plans, given the

necessity of paying the death benefit to a beneficiary and

given ERISA’s definition of a “beneficiary” as “a person

designated by a participant, or by the terms of an employee

benefit plan, who is or may become entitled to a benefit

thereunder.” 29 U.S.C. § 1002(8) (emphasis added).

Notably, the ERISA statute is devoid of any reference to a

designation of beneficiaries pursuant to State law. Again

without referring to State law, ERISA § 502 provides the

enforcement mechanism for benefits available to a

beneficiary under the terms of a plan. See 29 U.S.C.

§ 1132(a)(1) (a beneficiary may bring a civil action to

recover benefits due under the terms of a plan). To ensure

compliance with the beneficiary designation provisions

and other provisions of a plan, ERISA imposes on plan

fiduciaries the obligation to discharge their duties in

accordance with the governing plan documents. 29 U.S.C.

§ 1104(a)(1)(D).

Thus, the proper beneficiary under an ERISA plan

can be identified by the simple process of reading the

governing plan documents. See Metropolitan Life Ins. Co. v.

Marsh, 119 F.3d 415, 421 (6th Cir. 1997) (deciding the

beneficiary of ERISA plan benefits is “directly within the

scope of the plan’s authority”). For example, the Boeing

pension plan allows participants to designate a

beneficiary on an appropriate form. Joint Appendix at 39.

If a beneficiary is not properly designated or predeceases

the participant, the Boeing pension plan states that

benefits are paid to one of the following beneficiaries: the

surviving spouse; if no surviving spouse, the children in

equal shares; and if no surviving children, either to

another relative designated by the Boeing pension plan

administrator or to the participant's estate. Id. Thus, at

the time of a participant’s death, the appropriate Boeing

pension plan administrator neec's to undertake only the

following two simple steps:

(1) determine whether the participant has a

valid beneficiary designation form on file

and

(2) if there is proper designation, direct

payment to the designated beneficiary; if

there is no proper designation or if the

designated beneficiary has predeceased the

participant, direct payment in accordance

with the plan’s beneficiary priority.

B. A Patchwork of State Regulation Would Impose

Unnecessary Administrative Burdens on ERISA

Plans.

ERISA’s legislative history reveals a special concern

for ensuring that a uniform national law would govern a

plan’s cognizance over designating and paying

beneficiaries:

Statements by ERISA’s sponsors in the

House and Senate clearly disclose the problem

that the pre-emption provision was intended to

address... .

These statements reflect recognition of the

administrative realities of employee benefit

plans. An employer that makes a commitment

systematically to pay certain benefits

undertakes a host of obligations, such as

determining the eligibility of claimants, calculating

benefit levels, making disbursements,

monitoring the availability of funds for benefit

payments, and keeping appropriate records in

order to comply with applicable reporting

requirements. The most efficient way to meet these

responsibilities is to establish a uniform

administrative scheme, which provides a set of

standard procedures to guide processing of claims

and disbursement of benefits. Such a system is

difficult to achieve, however, if a benefit plan is

subject to differing regulatory requirements in

different States. A plan would be required to

keep certain records in some States but not in

others; to make certain benefits available in

some States but not in others; to process claims

in a certain way in some States but not in others;

and to comply with certain fiduciary standards

in some States but not in others.

Fort Halifax, 482 U.S. at 9 (emphasis added). State-by-

State regulation of the beneficiary designation process is

significantly more burdensome than ERISA’s simple

process of paying the beneficiary indicated by the

governing plan documents. A patchwork of State

regulation would require plan administrators to

undertake many additional actions, as described below.

First, a State-regulated plan administrator would

need to understand the applicable beneficiary law in all

states in which the plan sponsor maintains operations or

pays benefits (e.g., Boeing has operations located in 45

states and has paid benefits to participants who reside in

all 50 states).* This monitoring would have to be repeated

* The mere fact that employees can retire to States other

than the State in which they worked for an employer imposes a

potentially significant burden on plan administration, even for

on a periodic or distribution-by-distribution basis.*

Adding to the administrative burden would be the fact

that the source of law in each State is not plain,

potentially arising unser common law or codified in

probate, trust and estate, domestic relations, or

community property statutes. A sampling of the

beneficiary designation laws of just four States in which

Boeing has operations - Arizona, Montana, Oklahoma

and Virginia - demonstrates the potential diversity of

sources and substance. Ariz. Rev. Stat. ANN. § 14-2804

(trusts and estates); Mont. Cope ANN. § 72-2-814

(probate); 15 Oxia. Stat. § 178 (contracts); Va. Cope ANN.

an employer with operations in a single State. Absent ERISA

preemption, it is unclear, at best, whether the law of a foreign

State with no connection to an ERISA plan other than the

residence of a retired plan participant may govern that

participant’s beneficiary designation.

4 The historical underpinning of Revised Code of

Washington § 11.07.010 demonstrates the need to monitor

existing law. The Washington Legislature enacted § 11.07.010

effective January 1, 1995. Wasn. Rev. Cove § 11.07.010(6).

Immediately prior, Washington law was quite different. In Aetna

Life Ins. Co. v. Wadsworth, 102 Wn.2d 652, 689 P.2d 46 (1984), the

Washington Supreme Court created a judicial rule whereby a

dissolution decree that clearly indicated an intent to divest a

former spouse as a life insurance beneficiary would be

operative as long as the participant acted to remove the former

spouse as the designated beneficiary within a reasonable time

(generally, one year); if the former spouse was not timely

removed, then the court would conclusively presume the

former spouse to be the named beneficiary. 102 Wn.2d at 662.

Before 1984, the same issue in Washington was resolved under

yet other standards. Id. at 660-62.

10

§ 20-111.1 (domestic relations).5 If forced to deal with the

diversity of State laws, plan administrators would face

5 Arizona Revised Statute § 14-2804(A) provides, in

relevant part:

Except as provided by the express terms of a

governing instrument, a court order or a contract

relating to the division of the marital estate made

between a divorced couple before or after the

marriage, divorce or annulment, the divorce or

annulment of a marriage:

1. Revokes any revocable:

(a) Disposition or appointment of property

made by a divorced person to that person’s former

spouse in a governing instrument... .

A payor who relies in “good faith” on the validity of a

beneficiary designation is not liable for making payment before

the payor receives “written notice” of the divorce, annulment or

remarriage. Ariz. Rev. Stat. ANN. § 14-2804(F). Written notice

must be mailed to the payor’s main office or home by certified

mail, return receipt requested, or served on a payor in the same

manner as a summons in a civil action. Id. § 14-2804(G).

Montana Code § 72-2-814 is substantially similar to Arizona

Revised Statute § 14-2804. Even so, Montana law imposes

supplemental requirements. For example, Montana law states

that a payor is only liable for actions taken two or more business

days after actual receipt of a written notice of the divorce,

annulment or remarriage. Mont. Cope ANN. § 72-2-814(7)(a).

Moreover, Montana law requires that the written notice contain

a number of specific elements in order to be effective. Mont.

Cope ANN. § 72-2-814(7)(b).

Oklahoma Statute, Title 15, § 178 provides, in relevant part:

A. If, after entering into a written contract in which

a beneficiary is designated or provision is made for

the payment of any death benefit (including life

insurance contracts, annuities [and] retirement

arrangements... ), the party to the contract with the

power to designate the beneficiary or to make

11

burdens of paying for costly legal research, retaining

provision for payment of any death benefit dies after

being divorced from the person designated as the

beneficiary or named to receive such death benefit, all

provisions in the contract in favor of the decedent's

former spouse are thereby revoked. Annulment of the

marriage shall have the same effect as a divorce. In

the event of either divorce or annulment, the

decedent's former spouse shall be treated for all

purposes under the contract as having predeceased

the decedent.

B. Subsection A of this section shall not apply:

1. If the decree of divorce or annulment is

vacated;

2. If the decedent had remarried the former

spouse and was married to said spouse at the time of

the decedent's death;

3. If the decree of divorce or annulment

contains a provision expressing an intention contrary

to subsection A of this section;

4. If the decedent makes the contract

subsequent to the divorce or annulment;

5. To the extent, if any, the contract contains a

provision expressing an intention contrary to

subsection A of this section; or

6. If the decedent renames the former spouse as

the beneficiary or as the person or persons to whom

payment of a death benefit is to be made in a writing

delivered to the payor of the benefit prior to the death

of the decedent and subsequent to the divorce or

annulment.

Code of Virginia § 20-111.1 provides, in relevant part:

Upon the entry of a decree of annulment or

divorce from the bond of matrimony on and after

July 1, 1993, any revocable beneficiary designation

12

local counsel in each State or pursuing other means of

determining applicable State law.

If ERISA’s simple scheme for determining plan

beneficiaries was abandoned and replaced with a

multitude of varied State regulatory schemes, the range

of uncertainties faced by plan administrators would be

significantly increased. Each State scheme would

inevitably present its own unique set of uncertainties.

In fact, the Washington statute at issue in this appeal,

Revised Code of Washington § 11.07.010, is itself not

subject to simple interpretation. It contains several

detailed subsections that create ambiguous standards for

plan administrators. By way of example, one subsection

in § 11.07.010 states that the payor will not be responsible

for paying an employee benefit plan asset to a former

spouse if the payor did not have “actual knowledge” of

contained in a then existing written contract owned

by one party that provides for the payment of any

death benefit to the other party is revoked. A death

benefit prevented from passing to a former spouse by

this section shall be paid as if the former spouse had

predeceased the decedent. The payor of any death

benefit shall be discharged from all liability upon

payment in accordance with the terms of the contract

providing for the death benefit, unless the payor

receives written notice of a revocation under this

section prior to payment.

This section shall not apply (i) to the extent a decree

of annulment or divorce from the bond of matrimony,

or a written agreement of the parties provides for a

contrary result as to specific death benefits, or (ii) to

any trust or any death benefit payable to or under any

trust.

13

the marriage’s invalidation at the time of payment. Wasn.

Rev. Cope § 11.07.010(3)(a). The seemingly well-intended

provision does not effectively assist many plan

administrators with their payment decision-making. In

particular, it is unclear whether the Boeing pension plan

administrator would be deemed to have actual

knowledge of a divorce for purposes of paying a death

benefit if the participant had earlier removed her former

spouse as a dependent under one of the dozens of Boeing

medical plans. If so, and if the Boeing pension plan paid

the benefits, the Boeing pension plan could be exposed to

double payment liability under § 11.07.010(3)(a). The

increased uncertainty and liability - arising from just one

aspect of the law of just one State - indicate the

magnitude of the potential burden for plan

administrators if they are required to apply the diverse

laws of up to 50 states.

After making the State law determinations, a State-

regulated plan administrator would need to tailor the

plan's beneficiary designation procedures and forms in

accordance with varied State regulatory schemes. For

example, procedures would need to be developed for

ensuring that the plan pays the appropriate beneficiary

under the various State laws. And administrative forms

would need to address the effect of State law on who

ultimately receives a death benefit, so that participants

can make informed decisions about beneficiaries (and

beneficiary changes) and so that beneficiaries and other

claimants can understand the effect of past designations

or revocations by participants.

Perhaps the most difficult task of all for State-

regulated plan administrators would be that of sorting

through a wide range of choice of law questions.

Although an endless array of hypothetical situations

could be developed, the actual facts in the case of Hill v.

AT&T Corp., 125 F.3d 646 (8th Cir. 1997), reflect the

potential choice of law complications. The pertinent facts

14

were as follows:

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

John and Judy Hill married in the State of

Missouri in 1970;

while married and residing in Missouri,

Judy was employed by AT&T;

thereafter, the couple moved to the State

of Washington where Judy continued her

employment with AT&T;

in 1979, Judy affirmatively designated

John as her primary beneficiary under the

AT&T savings plan;

in July 1986, the couple separated and

John returned to Missouri;

Judy filed for divorce, and a Washington

court granted a default divorce decree in

November 1986;

Judy never modified her designation of

John as her primary beneficiary under the

AT&T savings plan;

following the divorce, Judy moved to the

State of Rhode Island, where she died in

1991 while still employed by AT&T;

John and the contingent beneficiary listed

on the plan’s beneficiary designation form

both claimed entitlement to Judy’s plan

benefits;

15

(10) despite receiving notice of these

competing claims, the plan paid benefits

to the contingent beneficiary; and

(11) John then filed a lawsuit in Missouri.

Id. at 647-48. Under these facts, if State law were to

govern ERISA plan beneficiary designations, arguments

could be made for applying the law of Missouri,

Washington or Rhode Island.* If a plan administrator

were to pay benefits after an erroneous choice of law

determination, the benefit plan would be at risk of double

payment liability.”

¢ John, the prevailing party, in fact argued that the

beneficiary designation was governed by the application of

Washington law as it existed prior to the enactment of Revised

Cede of Washington § 11.07.010 (see supra note 4). 125 F.3d at 648

n.4. The Eighth Circuit, however, declined to apply State law.

The court instead held that the controlling law was the federal

common law of ERISA, as developed in the Eighth Circuit, and

that the divorce decree was not sufficiently specific to divest

John of his beneficiary status. Id. at 648.

7 Hill v. AT&T Corp. provides an example of this risk of

double payment liability. There, the AT&T savings plan

administrator was determined by the Eighth Circuit to have

misapplied the law and was required to pay the benefits a

second time. Id. at 650. Moreover, the facts presented to the

Court by this petition also demonstrate this double payment

liability risk. The insurer of the Boeing life insurance plans

(Aetna) has already paid the policy benefits to Petitioner (the

participant’s former spouse, who is designated on the

beneficiary form). The Respondents (the participant’s children

by a prior marriage) have since filed suit against Aetna seeking

payment of those same benefits under Revised Code of

Washington § 11.07.010.

16

The inevitable administrative burdens that would

result from a patchwork of State regulation would

frustrate ERISA’s purpose of creating a uniform national

law for the efficient administration of employer-

sponsored benefit plans. To avoid this result, the Court

should decide that ERISA preempts Revised Code of

Washington § 11.07.010 and similar State laws. See

Manning v. Hayes, 212 F.3d 866, 870 (Sth Cir. 2000) (citing

decisions from the Federal circuits to support the

conclusion that a State law governing the designation of

an ERISA beneficiary is preempted by ERISA).

II. PLAN ADMINISTRATORS SHOULD BE ABLE TO

RELY SOLELY ON THE GOVERNING PLAN

DOCUMENTS IN DETERMINING ERISA PLAN

BENEFICIARIES.

Plan sponsors and administrators around the country

would benefit by avoiding a multiplicity of regulation

over identifying the proper beneficiary under ERISA

plans, especially in situations where a former spouse is

designated as a beneficiary at the time of death but

arguably waived some or all rights to the death benefits

at the time of divorce. The Court would save countless

costs and time expenditure by confirming the uniform

national law for all ERISA plans.

Boeing, the NAM and the Chamber respectfully

suggest that ERISA’s existing simple scheme -

determining beneficiaries solely by the provisions of the

governing plan documents - offers the most

administratively efficient standard for a uniform national

17

law.® As stated above, ERISA already contemplates that

the terms of an ERISA plan document will designate, or

create a means for designating, the plan’s beneficiary. See

29 U.S.C. § 1002(8). Further administrative scrutiny of

beneficiary designations is unnecessary. Such scrutiny

would serve only to complicate and confuse the

beneficiary designation process. See, e.g., Manning, 212

F.3d at 874 (an ERISA beneficiary may waive his or her

entitlement to the proceeds of an ERISA plan, provided

that the waiver is “explicit, voluntary, and made in good

faith”) (citation and internal quotation marks omitted);

Hill v. AT&T Corp., 125 F.3d at 650 (a divorce decree must

be sufficiently specific to convey the intent of the parties

to divest one or the other, or both, of an ERISA

beneficiary interest); Fox Valley & Vicinity Constr. Workers

Pension Fund v. Brown, 897 F.2d 275 (7th Cir. 1990) (same

proposition); Lyman Lumber Co. v. Hill, 877 F.2d 692 (8th

Cir. 1989) (same proposition). The objectives of ERISA

will be properly served by the Court’s confirmation that

an ERISA plan beneficiary is determined solely by the

governing plan documents - a particularly clear and

concise statement of the law and a standard that will

result in the efficient administrative process

contemplated by Congress.

Finally, ERISA’s beneficiary designation scheme of

looking to the governing plan documents is not only the

8 Although some lower courts have developed and applied

a Federal common law under ERISA to determine similar

beneficiary designation issues, see, e.g., Manning, 212 F.3d at 874,

Boeing, the NAM and the Chamber nonetheless believe that

resort to Federal common law is inappropriate when the ERISA

statute already establishes a beneficiary designation scheme.

18

best result for plan sponsors and administrators, but also

it favors the interests of plan participants. The simplicity

of the ERISA scheme allows participants, as well as their

legal and financial advisors, to determine from the

governing plan documents whether a beneficiary

designation in favor of a former spouse will remain valid

until the participant changes it, regardless of divorce or

other life events. This scheme is easy to communicate and

easy to understand. In addition, the efficiencies of a

uniform national law that is simple in design and in

operation will mitigate the potential for employers to

decrease pension and welfare benefits in order to pay for

increased administration and litigation costs arising from

beneficiary disputes. See Fort Halifax, 482 U.S. at 11.

S

CONCLUSION

The judgment below should be reversed and the

Court should hold that ERISA sets forth the uniform

national law which ERISA plan administrators must

apply to beneficiary designations.

Respectfully submitted,

Bruce D. Corker

Counsel of Record

Kurt E. LinsENMAYER

PerKINS COIE LLP

1201 Third Avenue

Suite 4800

Seattle, WA 98101-3099

(206) 583-8888

Counsel for Amici Curiae

ee

19

Of Counsel:

Pau. J. EHLENBACH

Assistant General Counsel

Loretta B. KePLer

Counsel

The Boeing Company

P.O. Box 3707 MC 13-08

Seattle, WA 98124-2707

(206) 655-6000

Of Counsel:

StePpHEN A. Boxart

Executive Vice President and Counsel

National Chamber Litigation Center, Inc.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

Of Counsel:

JAN AMUNDSON

General Counsel

QUENTIN RIEGEL

Deputy General Counsel

National Association of Manufacturers

1331 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-1790

(202) 637-3000

August 11, 2000