ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Alan J. Irvin Mary J. Hoeller
Indianapolis, Indiana Indianapolis, Indiana
IN THE
SUPREME COURT OF INDIANA
MIDWEST SECURITY LIFE )
INSURANCE COMPANY, )
)
Appellant (Defendant Below ), ) 06S05-0006-CV-364
) in the Supreme Court
v. )
) 06A05-9804-CV-201
THERESA A. STROUP and ) in the Court of Appeals
PATRICK J. STROUP, )
)
Appellees (Plaintiffs Below ). )
___________________________________________________________
APPEAL FROM THE BOONE SUPERIOR COURT
The Honorable Ora A. Kincaid III, Judge
Cause No. 06D01-9506-CP-139
June 13, 2000
SHEPARD, Chief Justice.
We grant transfer in this case to discuss whether common law claims for
breach of contract and bad faith are preempted by the Employee Retirement Income
Security Act of 1974 (ERISA). We hold that the claims in this
case are preempted by ERISA and reverse the trial court.
Factual and Procedural Background
Patrick and Theresa Stroup received a group health insurance policy from Midwest Security
Life Insurance Company as a result of Patrick’s employment with Ivy Homes.
The policy was governed by ERISA. On January 12, 1993, Theresa sought
predetermination of benefits for surgery to correct congenital problems with her jaw.
Midwest approved the surgery and Theresa underwent orthognathic surgery on April 13, 1994.
Complications arose from this surgery that required another procedure three weeks later.
About four months after Theresa’s surgeries, in August 1994, Midwest amended its plan
to exclude coverage for orthognathic surgery. After Theresa’s second surgery, she experienced
continuing jaw spasms and pain. Non-surgical treatment was unsuccessful and, in January
1995, Theresa requested predetermination for another surgery to her jaw. The
procedure was not considered a continuation of a course of care, but was
approved under Midwest’s Temporomandibular Joint Dysfunction (TMJ) coverage which capped benefits at 1,000
dollars per year.
To avoid the cost of another procedure, Theresa opted for continued non-surgical treatment
but, in October 1995, she awoke in considerable pain to discover that her
jaw had broken. One week later, Theresa underwent bone graft surgery to
repair her jaw. In January 1996, Theresa was forced to undergo another
surgery because of continued pain and muscle spasms in her jaw. This
surgery finally corrected the problems.
The Stroups filed suit against Midwest on June 26, 1995, for injunctive relief
and damages. They amended their complaint to add claims for breach of
contract and the tort of bad faith and to request both compensatory and
punitive damages and a jury trial. Midwest filed a motion for summary
judgment, arguing that the Stroups’ claims were preempted by ERISA and moving to
strike the Stroups’ request for a jury trial. The trial court held
that the Stroups’ state law claims were not preempted by ERISA, their request
for punitive damages was not preempted by ERISA, and the claims were triable
to a jury. On interlocutory appeal, the Court of Appeals reversed, holding
that the Stroups’ state law claims were preempted by ERISA and were not
preserved by the ERISA savings clause. Midwest Sec. Life Ins. Co. v.
Stroup, 706 N.E.2d 201, 207 (Ind. Ct. App. 1999). We granted the
Stroups’ petition for transfer.
Standard of Review
Though the appealing party bears the burden of persuasion in an appeal involving
summary judgment, we otherwise approach the question in the same way a trial
court does: summary judgment is appropriate only where the evidence shows there
is no genuine issue of material fact and the moving party is entitled
to a judgment as a matter of law. See Ind. Trial Rule
56(C); Shell Oil Co. v. Lovold Co., 705 N.E.2d 981 (Ind. 1998).
All facts and reasonable inferences drawn from those facts are construed in favor
of the nonmoving party. Colonial Penn Ins. Co. v. Guzorek, 690 N.E.2d
664 (Ind. 1997). The review of a summary judgment motion is limited
to those materials designated to the trial court. See T. R. 56(H);
see also Rosi v. Business Furniture Corp., 615 N.E.2d 431 (Ind. 1993).
We review decisions on summary judgment motions carefully to ensure that the
parties were not improperly denied their day in court. Estate of Shebel
ex rel. Shebel v. Yaskawa Elec. Am., Inc., 713 N.E.2d 275 (Ind. 1999).
In this case, the question of whether ERISA preempts the Stroups’ state
law claims is a question of law. Therefore, it is a matter
that may be properly determined on a motion for summary judgment.
Preemption under ERISA
The Stroups first contend that the Court of Appeals erred in determining that
the breach of contract and bad faith claims are preempted by ERISA.
The stated purpose of ERISA is to “protect . . . participants in
employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to
participants and beneficiaries of financial and other information with respect thereto, by establishing
standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and
by providing for appropriate remedies, sanctions, and ready access to Federal courts.”
See 29 U.S.C. § 1001(b) (1998). ERISA creates a federal statutory claim
for recovery of “benefits due to [the beneficiary] under the terms of his
plan, to enforce his rights under the terms of the plan, or to
clarify his rights to future benefits under the terms of the plan,”
Employee Retirement Income Security Act of 1974 (ERISA) § 502(a)(1)(B), 29 U.S.C. §
1132(a)(1)(B) (1994 & Supp. 1997). Suits under § 1132(a)(1)(B) may be brought
in either federal or state court. Id. § 1132(e)(1).
A. “Relates To”
ERISA provides for broad preemption of state law claims in 29 U.S.C. §
1144(a) which reads: “[e]xcept as provided in subsection (b) of this section,
the provisions of this subchapter and subchapter III of this chapter shall supercede
any and all State laws insofar as they may now or hereafter relate
to any employee benefit plan . . . .” The United States
Supreme Court has examined the legislative history surrounding § 1144(a) to determine that
“the words ‘relate to’ in [114]4(a) [were used by Congress] in their broad
sense.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 98 (1983)
(quoting Representative Dent that “the crowning achievement of this legislation [is] the reservation
to Federal authority [of] the sole power to regulate the field of employee
benefit plans”).
The courts have focused on the “relate to” language of § 1144(a) and
have held that a law “relates to” an employee benefit plan if it
has a connection with
See footnote
or a reference to such a plan. Pilot
Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47 (1987); accord Shaw, 463
U.S. at 96-97; California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A.,
Inc., 519 U.S. 316, 324 (1997). The preemption provision may apply even
to laws that are not specifically designed to affect employee benefit plans or
to laws that affect the plans only indirectly. Ingersoll-Rand Co. v. McClendon,
498 U.S. 133, 139 (1990).
It appears clear that Stroups’ breach of contract and bad faith claims “relate
to” employee benefit plans and therefore fall under the broad preemption provisions of
ERISA. These claims are based on Midwest’s failure to pay benefits due
under an ERISA-governed pension plan. The complaint asks for damages for breach
of the insurance contract and for punitive and compensatory damages for the tort
of bad faith based on Midwest’s denial of coverage under the insurance contract.
The claims clearly have connection with and refer to the ERISA plan.
The essence of the claims is a failure to supply benefits under the
plan. The U.S. Supreme Court addressed similar cases in
Pilot Life, 481
U.S. 41, and Ingersoll-Rand, 498 U.S. 133. In both cases, the Court
held that the plaintiffs’ common law claims related to ERISA and, therefore, were
subsumed under its broad preemption provision. Just as in Ingersoll-Rand, “there simply
is no cause of action if there is no plan.” 498 U.S.
at 140. Because the Stroups’ claims “relate to” an employee benefit plan,
in this case their medical insurance, the claims fall under ERISA’s broad preemption
powers.
B. Savings Clause
The Stroups contend that even if the claims “relate to” employee benefit plans
and would normally be preempted by ERISA, they are preserved by the “savings
clause.” The Stroups argue that the Court of Appeals analysis may be
correct under precedent as it then existed, but that the recent U.S. Supreme
Court opinion in Unum Life Ins. Co. v. Ward, 119 S. Ct. 1380
(1999), altered the test to be used under the savings clause.
The clause in question, 29 U.S.C. § 1144(b)(2)(A), provides that “nothing in this
subchapter shall be construed to exempt or relieve any person from any law
of any State which regulates insurance, banking, or securities.” This provision operates
as a “savings clause” to preserve state laws if they “regulate insurance” even
though the state law falls under ERISA’s broad preemption provision.
The Supreme Court has created a two-part test to determine if a state
law that “relates to” ERISA “regulates insurance” and therefore is saved. First,
because we “begin with the ordinary language employed by Congress and the assumption
that the ordinary language accurately expresses the legislative purpose,” the “common-sense view” of
the language of the savings clause is examined. Metropolitian Life Ins. Co.
v. Massachusetts, 471 U.S. 724, 740 (1985) (quoting Park’n Fly, Inc. v. Dollar
Park & Fly, Inc., 469 U.S. 189, 194 (1985)). Second, courts look
to case law interpreting the phrase “business of insurance” under the McCarran-Ferguson Act,
15 U.S.C. § 1011, which has focused on: (1) whether the practice
has the effect of transferring or spreading a policyholder’s risk; (2) whether the
practice is an integral part of the policy relationship between the insurer and
the insured; and (3) whether the practice is limited to entities within the
insurance industry. Pilot Life, 481 U.S. at 48-50.
A state law or practice “regulate[s] insurance” under the “common-sense view” if it
“is grounded in policy concerns specific to the insurance industry.” Unum Life,
119 S. Ct. at 1388. In Unum Life, the Court held that
California’s notice-prejudice rule “regulates insurance” because it “is directed specifically at the insurance
industry and is applicable only to insurance contracts.” Id. at 1386.
This is to be distinguished from a state law of general application that
may have an impact on the insurance industry. See Pilot Life, 481
U.S. at 50.
The three McCarran-Ferguson factors must also be examined. The Court held in
Unum Life that it was not necessary for all three criteria to be
present in order to avoid preemption under ERISA. 119 S. Ct. at
1389. In that case, the Court found that the “common sense” view
of California’s notice-prejudice rule was that it “regulates insurance.” Id. The
Court went on to note, however, that only two of the three McCarran-Ferguson
factors were present, and that “none of these criteria is necessarily determinative in
itself.” Id.
The Stroups breach of contract and bad faith claims do not fall under
a “common-sense view” of the phrase “regulates insurance,” nor do they satisfy the
McCarran-Ferguson factors previously examined by the U.S. Supreme Court when determining whether a
state law falls under the savings clause. The breach of contract claim
clearly does not turn on a law that regulates insurance. It is
a claim founded on general contract principles that happens to apply to an
insurance contract in this instance. There are no specific insurance industry concerns,
and state breach of contract law is not directed at the insurance industry
any more than it is directed at any other industry.
Indiana’s tort of bad faith also does not fall under a “common-sense” understanding
of “regulates insurance.” The tort was established in Erie Ins. Co. v.
Hickman, 622 N.E.2d 515, 519 (Ind. 1993). We applied general tort theories
to determine that a breach of the duty of good faith may be
an independent tort compensable with punitive damages
Likewise, the Stroups’ claims do not satisfy the McCarran-Ferguson factors that determine if
a practice falls under the “business of insurance.” The first factor, whether
the state law or rule at issue “has the effect of transferring or
spreading a policyholder’s risk,” is not applicable to either the breach of contract
claim or the tort of bad faith. See Pilot Life, 481 U.S.
at 50. The Stroups contend that Indiana’s tort of bad faith spreads
the insurance risk because insurers in Indiana that are not shielded from liability
by ERISA will undoubtedly spread the risk as they raise premiums to cover
bad faith claims. This alleged connection between the tort of bad faith
and spreading policyholder’s risk is too attenuated to satisfy this criterion. It
would apply to any claim against an insurance company. Furthermore, the Stroups’
argument “does not alter the allocation of risk for which the parties initially
contracted” as required under this factor. Unum Life, 119 S. Ct. at
1389 (citations omitted).
The second factor, whether the breach of contract or tort of bad faith
serves as “an integral part of the policy relationship between the insurer and
the insured” is also unsatisfied. The Stroups’ breach of contract claim does
not establish the contract terms and is merely a remedy when one party
does not honor the terms of the contract. The tort of bad
faith is also not integral to the relationship between the insurer and insured.
It serves the same function as any other general contract or tort
law. As in Pilot Life, that tort “does not define the terms
of the relationship,” 481 U.S. at 51, but merely allows for punitive damages
in the event of breach of the insurance contract in bad faith.
This is not a case where the state law “changes the bargain between
the insurer and insured” by adding a mandatory contract term as the California
notice-prejudice rule did in Unum. 119 S. Ct. at 1389.
Finally, the third factor is whether the practice is limited to the insurance
industry. We need not resolve that because, even if it were so
limited, we conclude, like the Court of Appeals, that the three factors taken
together do not render Indiana’s tort of bad faith a state law “regulating
insurance.”
Because the breach of contract and tort of bad faith claims satisfy neither
the “common-sense view” of “regulates insurance” nor the McCarran-Ferguson factors, they are not
saved under ERISA, and are preempted.
Because we agree with the Court of Appeals that the Stroups’ state law
claims are preempted by ERISA, we do not need to address whether a
jury trial would be allowed for either the state law claims or for
claims under ERISA.
Conclusion
The judgment of the trial court is reversed and remanded with instructions to
grant Midwest’s motion for summary judgment on ERISA preemption.
Dickson, Sullivan, Boehm, and Rucker, JJ., concur.
Boehm, J., concurs with separate opinion in which Dickson, J., joins.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Alan J. Irvin Mary J. Hoeller
Indianapolis, Indiana Indianapolis, Indiana
__________________________________________________________________
IN THE
SUPREME COURT OF INDIANA
__________________________________________________________________
MIDWEST SECURITY LIFE )
INSURANCE COMPANY, )
)
Appellant (Defendant Below), ) Indiana Supreme Court
) Cause No. 06S05-0006-CV-364
v. )
) Indiana Court of Appeals
THERESA A. STROUP and ) Cause No. 06A05-9804-CV-201
PATRICK J. STROUP, )
)
Appellees (Plaintiffs Below). )
__________________________________________________________________
APPEAL FROM THE BOONE SUPERIOR COURT
The Honorable Ora A. Kincaid III, Judge
Cause No. 06D01-9506-CP-139
__________________________________________________________________
ON PETITION TO TRANSFER
__________________________________________________________________
June 13, 2000
BOEHM, Justice, concurring.
I concur in the majority’s resolution of the ERISA preemption issue. I
write separately because the case may or may not be over, and the
Court of Appeals expressed views with which I disagree as to the right
to a jury trial in the courts of this state under Article I,
Section 20 of the Indiana Constitution.
As the majority opinion observed, ERISA creates a federal statutory claim for recovery
of “benefits due to [the beneficiary] under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify his
rights to future benefits under the terms of the plan.” Employee Retirement Income
Security Act of 1974 (ERISA) § 502 (a)(1)(B), 29 U.S.C. § 1132(a)(1)(B) (1994
& Supp. III 1997). The Court of Appeals noted that, unlike most
claims created by ERISA, an ERISA claim under § 502 (a)(1)(B) may be
asserted in a state court, but held that even if the Stroups asserted
such a claim under ERISA, they would not be entitled to a jury
trial.
See Midwest Sec. Life Ins. Co. v. Stroup, 706 N.E.2d 201,
207-08 (Ind. Ct. App. 1999). Article I, Section 20 of the Indiana
Constitution provides that “[i]n all civil cases, the right of trial by jury
shall remain inviolate.” The Court of Appeals took the view that this
constitutional provision preserved a jury right only in those civil cases triable by
jury at common law, and reasoned that because ERISA did not exist at
common law, there is no right to a jury trial in an Indiana
state court for an ERISA claim. I believe this is an unduly
restrictive view of Article I, Section 20.
Both Article I, Section 20 and Indiana Trial Rule 38(A) provide for the
right of a trial by jury in certain instances. The right to
a jury trial is a “fundamental right in our democratic judicial system” that
must be “scrupulously guarded” against encroachment.
Levison v. Citizens Nat’l Bank, 644
N.E.2d 1264, 1267 (Ind. Ct. App. 1994). In my view, the crucial
inquiry, however, is not, as the Court of Appeals put it, whether a
cause of action existed at common law. Rather, it is whether the
cause of action is essentially legal or equitable, as those terms were used
in 1852. See Midwest Fertilizer Co. v. Ag-Chem Equip. Co., 510 N.E.2d
232, 233 (Ind. Ct. App. 1987) (“[T]he key determination to be made is
whether the claim involved is legal or equitable in character.”). If an
action is essentially legal in nature, a jury demand must be honored, but
those causes of action that are equitable may be tried to the court.
This formulation can be found in several Indiana decisions, both recent and
ancient. See, e.g., Fager v. Hundt, 610 N.E.2d 246, 253 n.9 (Ind.
1993); Dean v. State ex rel. Bd. of Med. Registration & Examination, 233
Ind. 25, 31-32, 116 N.E.2d 503, 507 (1954); Fish v. Prudential Ins. Co.,
225 Ind. 448, 452-53, 75 N.E.2d 57, 59 (1947); Martin v. Martin, 118
Ind. 227, 237, 20 N.E. 763, 767-68 (1889).
If the cause of action existed on June 18, 1852, then this issue
is decided by history. Legal actions at that time included replevin, ejectment,
fraudulent conveyances, and actions for money damages,
see City of Terre Haute v.
Deckard, 243 Ind. 289, 293, 183 N.E.2d 815, 817 (1962); Howell v. State
Farm Fire & Cas. Co., 530 N.E.2d 318, 319-20 (Ind. Ct. App. 1988),
while equitable actions included injunctions, reformations, derivative actions, accounting, discovery, and land transactions,
see Dean, 233 Ind. at 31-32, 116 N.E.2d at 507; Sikich v. Springmann,
221 Ind. 483, 487-88, 48 N.E.2d 808, 809-10 (1943); Lewandowski v. Beverly, 420
N.E.2d 1278, 1282 (Ind. Ct. App. 1981).
If, however, the cause of action is one that was not in existence
in 1852, it is necessary to determine whether it is closer to a
claim at law or one in equity. “To determine whether or not
a party is entitled to a trial by jury, we look beyond the
label given a particular action and evaluate the nature of the underlying substantive
claim.”
Hacienda Mexican Restaurant v. Hacienda Franchise Group, Inc., 641 N.E.2d 1036,
1041 (Ind. Ct. App. 1994). This involves evaluating “the complaint, the rights
and interest[s] involved, and the relief demanded.” Levison, 644 N.E.2d at 1267.
Under the Court of Appeals’ approach in this case, parties filing suit under
any statutory scheme that has been developed since 1852 would not be entitled
to a jury trial because the cause of action did not exist at
common law. Presumably, the same reasoning would deny a jury trial for
claims under common law theories—for example, invasion of privacy—that did not exist 150
years ago. No case seems to suggest that result, and for good
reason.
Indiana statutes have created a number of causes of action. Some of
these are very much in the nature of tort suits for damages that
are, in my view, triable to a jury as a matter of constitutional
right. For example, the Indiana legislature has created causes of action for
deceptive business practices in the cigarette industry, the unauthorized use of a watercraft
as a plug to make a mold to duplicate the watercraft, and strict
liability for defects in products.
See Ind. Code §§ 24-3-2-1 to -13
(1998); §§ 24-4-8-1 to -7 (1998); §§ 34-20-1-1 to 34-20-9-1 (1998). On
the other hand, some are arguably more analogous to traditionally equitable claims.
For example, in Arnold v. Dirrim, 398 N.E.2d 426, 438-39 (Ind. Ct. App.
1979), a jury demand for a claim under the Indiana Securities Act was
held properly refused not because the statutory claim did not exist in 1852,
but because it was viewed as essentially a claim for rescission, which was
a claim in equity. Finally, in some instances the statute creating a
new cause of action will also purport to establish the right to a
jury trial. Whether or not this is a mandate the courts are
required to honor, courts generally have granted a jury trial if it is
provided by the statute creating a cause of action. See Deig v.
Morehead, 110 Ind. 451, 454-55, 11 N.E. 458, 459-60 (1887) (statute governing will
contests allows for jury trials); Lake Erie, Wabash, & St. Louis R.R. Co.
v. Heath, 9 Ind. 558, 561 (1857) (“We may observe that the legislature
may prescribe the trial by jury in cases where the constitution does not
give it as a right; but they cannot withhold it in cases where
it is so given.”).
There is a split of authority on whether an ERISA claim is equitable
or legal in nature. Midwest cites several federal cases holding that ERISA
claims are not entitled to a jury trial.
See Blake v. Unionmutual
Stock Life Ins. Co., 906 F.2d 1525, 1526 (11th Cir. 1990); Wardle v.
Central States, Southeast & Southwest Areas Pension Fund, 627 F.2d 820, 829 (7th
Cir. 1980), abrogation on other grounds recognized by Casey v. Uddeholm Corp., 32
F.3d 1094, 1099 n.4 (7th Cir. 1994); Allison v. Dugan, 737 F. Supp.
1043, 1047 (N.D. Ind. 1990), rev’d in part on other grounds, 951 F.2d
828 (7th Cir. 1992). Many of the federal cases discussing the right
to a jury trial in ERISA claims seem to stem from Wardle, which
analyzed the issue in terms of the legal or equitable nature of the
claims. In that case the suit was for benefits under a pension
plan. Under trust law, a beneficiary’s suit against the trustee is viewed
as an action at law only if it is for an amount due
“immediately and unconditionally.” Restatement (Second) of Trusts § 198 (1959). Otherwise,
it is in the nature of an equitable claim. The court in
Wardle found the claim to be analogous to a claim for benefits under
a trust. See 627 F.2d at 829. Whether this reasoning applies
to all ERISA § 502(a)(1)(B) claims seems debatable. At any rate, some
state courts have concluded that ERISA claims require a jury trial because they
are similar to suits for breach of contract or are for legal remedies.
See Head v. Central Reserve Life, 845 P.2d 735, 741 (Mont. 1993);
Fuller v. INA Life Ins. Co., 533 N.Y.S.2d 215, 218 (Sup. Ct. 1988);
Shaw v. Atlantic Coast Life Ins. Co., 470 S.E.2d 382, 387 (S.C. Ct.
App. 1996); see also Ex parte Metropolitan Life Ins. Co., 679 So. 2d
686, 689 (Ala. 1996) (concurring opinion). There also appears to be at
least some federal authority to that effect. See, e.g., Vicinanzo v. Brunschwig
& Fils, Inc., 739 F. Supp. 882, 885-91 (S.D.N.Y. 1990) (action for medical
and life insurance benefits is essentially contractual and legal in nature requiring a
jury trial).
State law, including the state constitution and trial rules, governs whether a right
to a jury trial exists in a suit brought in state court even
if the cause of action arises under federal law.
See Brown v.
Gerdes, 321 U.S. 178, 189-90 (1944) (Frankfurter, J., concurring); Louisville & Nashville R.R.
Co. v. Stewart, 241 U.S. 261, 263 (1916); Hiatt v. Yergin, 152 Ind.
App. 497, 520-27, 284 N.E.2d 834, 847-50 (1972), overruled on other grounds by
Erdman v. White, 411 N.E.2d 653, 656-57 (Ind. Ct. App. 1980).
See footnote
Indiana
constitutional jury trial jurisprudence diverges from the Seventh Amendment in a number of
respects. See, e.g., Hiatt, 152 Ind. App. at 520-27, 284 N.E.2d at
847-50 (rejecting Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962), and Beacon
Theatres, Inc. v. Westover, 359 U.S. 500 (1959)). Thus, even if federal
authorities correctly deny a jury trial in federal court for any claim under
ERISA § 502(a)(1)(B), the question remains whether a claim in an Indiana court
is legal or equitable in nature, and that issue is dispositive of
the jury trial right in a state court.
In my view, the state law tort and contract claims the Stroups sought
to assert would have been legal in nature as claims for money damages.
It is unclear what, if any, ERISA claims the Stroups will bring
and what relief they may seek. If and when the Stroups are
permitted to amend their complaint to add ERISA claims, whether these claims will
support a jury demand is better resolved by the trial court. In
the meantime, I write separately because I do not agree with the Court
of Appeals as to the right to a jury trial under the Indiana
Constitution.
DICKSON, J., concurs.
Footnote:
The Stroups contend that the Pilot Life test for determining if
a state law “relates to” ERISA was altered by California Div. of Labor
Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316 (1997), and cases
that follow it. Specifically, they contend that the “connection with” portion of
the test has been replaced by a two-part test that focuses on whether
the law impacts ERISA and congressional intent. In Dillingham, the Court stated
that “to determine whether a state law has the forbidden connection, we look
both to the objectives of the ERISA statute as a guide to the
scope of the state law that Congress understood would survive as well as
to the nature of the effect of the state law on ERISA plans.”
519 U.S. at 325 (citations omitted). The two factors the Stroups
listed are used to determine whether a state law has a connection with
ERISA. They do not, as the Stroups claim, displace the “connection with”
alternative.
Footnote:
This may not be true if the right to a jury trial
is “part and parcel of the remedy afforded” under the federal legislation.
Dice v. Akron, Canton & Youngstown R.R. Co., 342 U.S. 359, 363 (1952)
(citations omitted) (“[T]he right to trial by jury is too substantial a part
of the rights accorded by the [Federal Employers’ Liability] Act to permit it
to be classified as a mere ‘local rule of procedure.’”).