US Supreme Court Briefs

99-1529

In the Supreme Court of the United States

 

DONNA RAE EGELHOFF, PETITIONER

v.

SAMANTHA EGELHOFF, A MINOR, BY AND THROUGH
HER NATURAL PARENT KATE BREINER,
AND DAVID EGELHOFF

 

ON WRIT OF CERTIORARI
TO THE SUPREME COURT OF WASHINGTON

BRIEF FOR THE UNITED STATES AS
AMICUS CURIAE SUPPORTING PETITIONER

SETH P. WAXMAN
Solicitor General
Counsel of Record
DAVID W. OGDEN
Assistant Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
BARBARA MCDOWELL
Assistant to the Solicitor
General
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

HENRY L. SOLANO
Solicitor of Labor
NATHANIEL I. SPILLER
Deputy Associate Solicitor
ELIZABETH HOPKINS
Attorney
Department of Labor
Washington, D.C. 20210

 

QUESTION PRESENTED

Whether the Employee Retirement Income Security Act of 1974 (ERISA),29 U.S.C. 1001 et seq., preempts a state law that purports to revoke thedesignation of beneficiary made pursuant to the terms of an ERISA plan.

 

In the Supreme Court of the United States

 

NO. 99-1529

DONNA RAE EGELHOFF, PETITIONER

v.

SAMANTHA EGELHOFF, A MINOR, BY AND THROUGH
HER NATURAL PARENT KATE BREINER,
AND DAVID EGELHOFF

 

ON WRIT OF CERTIORARI
TO THE SUPREME COURT OF WASHINGTON

BRIEF FOR THE UNITED STATES AS
AMICUS CURIAE SUPPORTING PETITIONER

 

INTEREST OF THE UNITED STATES

This case presents the question whether the Employee Retirement IncomeSecurity Act of 1974 (ERISA or the Act), 29 U.S.C. 1001 et seq., preemptsa state law that purports to revoke a beneficiary designation made, in accordancewith the terms of an ERISA-governed employee benefit plan, by a participantin that plan. The Secretary of Labor has primary rulemaking and enforcementauthority under Title I of ERISA, see 29 U.S.C. 1002(13), 1136(b), and thereforehas a strong interest in ensuring that preemption principles are properlyapplied by the courts to ensure a nationally uniform system of plan administration.

STATEMENT

1. Petitioner, Donna Rae Egelhoff, was the second wife of David Egelhoff.During their marriage, David Egelhoff designated petitioner as beneficiaryunder a life insurance plan and a pension plan, both of which were sponsoredby his employer, The Boeing Company, and governed by ERISA. Pet. App. 1a-3a,30a.

Petitioner and David Egelhoff subsequently divorced. Pursuant to a documentincorporated into the decree of dissolution, entered April 22, 1994, DavidEgelhoff was granted "100% of his Boeing retirement 401K and IRA."No mention was made in the document of David Egelhoff's life insurance policy.Pet. App. 3a, 30a.

On July 8, 1994, David Egelhoff died intestate, following an automobileaccident. At that time, petitioner remained the beneficiary of record underboth David Egelhoff's life insurance policy and his pension plan. The lifeinsurance proceeds, totaling $46,000, were paid to her. Pet. App. 4a, 30a.

2. a. Respondents, who are David Egelhoff's children by his first marriageand his statutory heirs under state law, filed a conversion action againstpetitioner, seeking to recover the life insurance proceeds. They contendedthat their father's designation of petitioner as beneficiary under the lifeinsurance policy was "revoked," by operation of state law, uponpetitioner's divorce from Egelhoff. Pet. App. 4a-5a.

Respondents relied on Section 11.07.010 of the Washington Revised CodeAnnotated, which provides, in pertinent part:

If a marriage is dissolved or invalidated, a provision made prior tothat event that relates to the payment or transfer at death of the decedent'sinterest in a nonprobate asset in favor of or granting an interest or powerto the decedent's former spouse is revoked. A provision affected by thissection must be interpreted, and the nonprobate asset affected passes, asif the former spouse failed to survive the decedent, having died at thetime of entry of the decree of dissolution or declaration of invalidity.

Wash. Rev. Code Ann. § 11.07.010(2)(a) (West 1998). The statuteapplies to "all nonprobate assets, wherever situated, held at the timeof entry by a superior court of this state of a decree of dissolution ofmarriage." Id. § 11.07.010(1). The statute defines the term "nonprobateassets" to include "a payable-on-death provision of a life insurancepolicy, employee benefit plan, annuity or similar contract, or individualretirement account." Id. § 11.07.010(5)(a).

b. Respondents separately brought suit against petitioner for the pensionbenefits, claiming that, under the property settlement incorporated intothe divorce decree, petitioner had waived any right to those benefits. Theyfurther claimed that, in the event of such a waiver by David Egelhoff'sonly designated beneficiary, they became the beneficiaries under the termsof the plan. Pet. App. 6a, 30a-31a.

c. The state trial courts granted summary judgment in favor of petitionerin both cases. The courts concluded that the pension and insurance benefits"should be administered in accordance with" ERISA. Pet. App. 45a-48a.

3. The state court of appeals consolidated the cases and then reversed.Pet. App. 29a-44a. The court held that respondents, as their father's statutoryheirs, were entitled under Section 11.07.010 to the life insurance proceedsand the pension benefits. Id. at 35a. The court rejected the trial courts'conclusion that ERISA preempts the application of Section 11.07.010 to alterthe designation of beneficiaries under an employee benefit plan coveredby ERISA, relying on the Ninth Circuit's decision in Emard v. Hughes AircraftCo., 153 F.3d 949 (1998), cert. denied, 525 U.S. 1122 (1999), upholdingthe use of state law to alter such a designation. Pet. App. 35a-42a.1

4. The Washington Supreme Court affirmed. Pet. App. 1a-27a.

a. The state supreme court recognized that "ERISA contains a broadpreemption provision that supersedes state laws that 'relate to' employeebenefit plans," and that this Court has traditionally accorded theprovision an "expansive interpretation." Pet. App. 10a (citing29 U.S.C. 1144(a)), 12a. But the court read three of this Court's recentERISA preemption decisions, beginning with New York State Conference ofBlue Cross & Blue Shield Plans v. Travelers Insurance Co., 514 U.S.645 (1995), as "signal[ing] a significant retreat" from that earlierapproach. Pet. App. 12a. The court also acknowledged, however, that thepreemption provision continues after Travelers to invalidate those statelaws that either "refer[] to" or have a "connection with"ERISA plans. Id. at 19a.

First, the state supreme court held that Section 11.07.010, althoughexpressly referring to benefits payable under, inter alia, "employeebenefit plan[s]," does not "refer to" ERISA plans to an extentthat requires preemption. Pet. App. 19a-20a. The court, invoking this Court'sdiscussion of the "reference to" prong of ERISA preemption analysisin California Division of Labor Standards Enforcement v. Dillingham Construction,N.A., Inc., 519 U.S. 316 (1997), stated that Section 11.07.010 "doesnot apply immediately and exclusively to an ERISA plan, nor is the existenceof such a plan essential to operation of the statute." Pet. App. 20a.

Second, the state supreme court held that Section 11.07.010 does nothave a sufficient "connection with" ERISA plans to require preemption.Pet. App. 20a. The court noted that a state law "[g]enerally"has a prohibited "connection with" an ERISA plan if it "mandatesplan benefit structures or some aspect of their administration." Ibid.But the court reasoned that "the mere fact that [Section 11.07.010]may operate upon the beneficiary designation in an ERISA plan" is notsufficient to bring it within that category. Id. at 21a. The court viewedSection 11.07.010 as merely triggering the plan's own default provisionsunder the "legal fiction that the former spouse did not survive thedecedent," and thus as not "alter[ing] the nature of the planitself, the administrator's fiduciary duties, or the requirements for planadministration." Ibid. (internal quotation marks and brackets omitted).

b. The state supreme court then turned to the issue of conflict preemption.The court held that Section 11.07.010 does not conflict with ERISA's anti-alienationprovision, 29 U.S.C. 1056(d)(1), which states that "[e]ach pensionplan shall provide that benefits provided under the plan may not be assignedor alienated." Pet. App. 23a. The court reasoned that the state statute"does not operate to divert benefit plan proceeds from distributionunder terms of the plan documents," but merely alters "the underlyingcircumstances to which the distribution scheme of [the] plan must be applied."Id. at 25a- 26a.

SUMMARY OF ARGUMENT

The state statute at issue in this case, Section 11.07.010 of the WashingtonRevised Code Annotated, is preempted in its application to employee benefitplans governed by ERISA. Section 11.07.010, as a state law that "relate[s]to any employee benefit plan," is expressly preempted under Section514(a) of ERISA, 29 U.S.C. 1144(a). In addition, Section 11.07.010 squarelyconflicts with several substantive provisions of ERISA, and thus is preemptedunder ordinary conflict preemption principles.

A. Section 11.07.010 "relate[s] to" ERISA plans, within themeaning of Section 514(a), by regulating an area of core concern under ERISA,the designation of beneficiaries and payment of benefits under ERISA plans.The state statute directly, indeed expressly, addresses who is to receivebenefits under "[a] payable-on-death provision of a[n] * * * employeebenefit plan." Wash. Rev. Code Ann. § 11.07.010(5)(a) (West 1998).The statute "revokes" a participant's designation of his or herspouse as a beneficiary under the plan if the participant and the spousedivorce after the designation is made. Id. § 11.07.010(2)(a). The statutethus dictates who is, and who is not, entitled to benefits under an ERISAplan.

Congress did not intend to leave such central questions in the administrationof ERISA plans for resolution under state law. To the contrary, Congresssought to establish uniform "standards of conduct, responsibility,and obligation for fiduciaries of employee benefit plans," by, interalia, directing that fiduciaries act "in accordance with the documentsand instruments governing the plan insofar as such documents and instrumentsare consistent with [ERISA]." 29 U.S.C. 1001(b); 29 U.S.C. 1104(a)(1)(D).Congress also directed that fiduciaries administer such plans "forthe exclusive purpose of * * * providing benefits to participants and theirbeneficiaries," defining the latter as those persons "designatedby a participant, or by the terms of an employee benefit plan," toreceive benefits. 29 U.S.C. 1104(a)(1)(A); 29 U.S.C. 1002(8). Congress thusintended that fiduciaries, in determining who is entitled to benefits underan ERISA plan, look only to ERISA itself, the governing plan documents,and the participant's beneficiary designation, and not to state law.

Clearly, then, those areas in which Congress sought "to avoid amultiplicity of regulations in order to permit the nationally uniform administrationof employee benefit plans," New York State Conference of Blue Cross& Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 658 (1995),include the designation of beneficiaries and the payment of benefits undersuch plans. State laws, such as Section 11.07.010, that purport to regulatein those areas are expressly preempted under Section 514(a) of ERISA.

B. In addition, Section 11.07.010 is preempted in its application toERISA plans because it "conflicts with the provisions of ERISA"and "operates to frustrate its objects." Boggs v. Boggs, 520 U.S.833, 841 (1997). As noted above, ERISA requires that employee benefit plansbe administered "in accordance with the documents and instruments governingthe plan," 29 U.S.C. 1104(a)(1)(D), and specifically defines beneficiariesas those "designated by a participant, or by the terms of an employeebenefit plan," 29 U.S.C. 1002(8). Those provisions require that benefitsbe paid to the person designated under the terms of the plan. Section 11.07.010,by contrast, requires that the benefits be paid to somebody else. And, inso doing, Section 11.07.010 undermines Congress's intent that employee benefitplans be uniform in their administration and simple in their application,so that participants, beneficiaries, and administrators are able to understandtheir rights and responsibilities with certainty.

Section 11.07.010 also conflicts with yet another provision of ERISA,29 U.S.C. 1056(d)(1), which prohibits pension plan benefits from being "assignedor alienated," and thus from being diverted to purposes other thanproviding for participants and their designated beneficiaries. Section 11.07.010extinguishes a designated beneficiary's right to pension benefits and, ineffect, "assigns" and "alienates" those bene-fits toanother person. Accordingly, to the extent that Section 11.07.010 appliesto ERISA pension plans, it is preempted for this additional reason.

ARGUMENT

ERISA PREEMPTS STATE LAW DISALLOWING THE DISTRIBUTION OF PENSION ANDWELFARE BENEFITS TO THE BENEFICIARY WHO HAS BEEN PROPERLY DESIGNATED UNDERTHE TERMS OF AN ERISA PLAN

ERISA is a "comprehensive statute designed to promote the interestsof employees and their beneficiaries in employee benefit plans." Shawv. Delta Air Lines, Inc., 463 U.S. 85, 90 (1983). To that end, ERISA "setsvarious uniform standards, including rules concerning reporting, disclosure,and fiduciary responsibility, for both pension and welfare plans,"and "imposes participation, funding, and vesting requirements on pensionplans." Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137 (1990) (quotingShaw, 463 U.S. at 91). In addition, ERISA provides "a carefully integratedcivil enforcement scheme that is one of the essential tools for accomplishingthe stated purposes of ERISA." Ibid. (internal quotation marks andcitation omitted).

Section 514(a) of ERISA, 29 U.S.C. 1144(a), is an express preemptionprovision that, subject to various exceptions not at issue here,2 "shallsupersede any and all State laws insofar as they may now or hereafter relateto any employee benefit plan" governed by ERISA. As this Court hasexplained, Section 514(a) "indicates Congress's intent to establishthe regulation of [ERISA] plans 'as exclusively a federal concern.'"New York State Conference of Blue Cross & Blue Shield Plans v. TravelersIns. Co., 514 U.S. 645, 656 (1995) (quoting Alessi v. Raybestos-Manhattan,Inc., 451 U.S. 504, 523 (1981)). Section 514(a) was designed "to ensurethat plans and plan sponsors would be subject to a uniform body of benefitslaw," and thus "to minimize the administrative and financial burdenof complying with conflicting directives among States or between Statesand the Federal Government." Ibid. (quoting Ingersoll-Rand, 498 U.S.at 142).3

Accordingly, Section 514(a), while not without limits, is "clearlyexpansive" in its preemptive sweep. California Div. of Labor StandardsEnforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 324 (1997)(quoting Travelers, 514 U.S. at 655). To be sure, Section 514(a) does notreach state laws of general applicability that have only an "indirecteconomic influence" or some other merely incidental impact on ERISAplans. Travelers, 514 U.S. at 659. To the extent, however, that a statelaw purports to regulate matters at the core of ERISA-such as the contentor administration of ERISA plans or the mechanisms for enforcing rightsunder those plans-this Court has not hesitated to hold the state law preemptedunder Section 514(a). See Travelers, 514 U.S. at 657-658 (discussing Shaw,Alessi, Ingersoll-Rand, and FMC Corp. v. Holliday, 498 U.S. 52, 60 (1990));see also Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 739(1985) (Section 514(a) "displace[s] all state laws that fall withinits sphere, even including state laws that are consistent with ERISA's substantiverequirements").

Moreover, whatever the limits of express preemption under Section 514(a),ERISA, like all federal statutes, operates under supremacy principles thatrequire preemption "where compliance with both federal and state regulationsis a physical impossibility, . . . or where state law stands as an obstacleto the accomplishment and execution of the full purposes and objectivesof Congress." Boggs v. Boggs, 520 U.S. 833, 844 (1997) (quoting Gadev. National Solid Wastes Management Ass'n, 505 U.S. 88, 98 (1992)); seealso, e.g., Ingersoll-Rand, 498 U.S. at 142-145. Thus, in Boggs, becausethe state community property law at issue "conflict[ed] with the provisionsof ERISA" and "operat[ed] to frustrate its objects," theCourt perceived no need to inquire whether Section 514(a) "provide[d]further and additional support for the pre-emption claim." 520 U.S.at 841.

Here, the Washington statute, to the extent that it overrides beneficiarydesignations made in accordance with the provisions of an ERISA plan, ispreempted, whether the question is analyzed as one of express preemptionor of conflict preemption. The state statute "relate[s] to an[] employeebenefit plan" governed by ERISA, within the meaning of Section 514(a),because the statute expressly refers to rights under "employee benefitplans" and seeks to regulate core matters in the administration ofsuch plans, the designation of beneficiaries and the distribution of benefits.The state statute squarely conflicts with Congress's directive that fiduciariesadminister ERISA plans "in accordance with the documents and instrumentsgoverning the plan," 29 U.S.C. 1104(a)(1)(D), because the statute requiresthe payment of benefits to persons other than those entitled to them underthe governing plan documents. In addition, to the extent that the statestatute reaches the payment of benefits under ERISA pension plans, the statutealso conflicts with 29 U.S.C. 1056(d)(1), which prohibits the assignmentor alienation of pension plan benefits.

 

I. The Washington Statute, As A State Law That "Relate[s] To"Employee Benefit Plans Governed By ERISA, Is Preempted Under Section 514(a)

 

This Court has recognized that Section 514(a), in "supersed[ing]any and all State laws insofar as they * * * relate to any employee benefitplan" governed by ERISA, is a preemption provision "conspicuousfor its breadth." Dillingham, 519 U.S. at 324 (quoting FMC Corp., 498U.S. at 58). The Court has also recognized, however, that Congress couldnot have intended Section 514(a) to "extend to the furthest stretchof its indeterminacy," preempting state laws of general applicabilitythat have "only a tenuous, remote, or peripheral connection with coveredplans." Travelers, 514 U.S. at 655, 661 (quoting District of Columbiav. Greater Washington Bd. of Trade, 506 U.S. 125, 130 n.1 (1992)). The Courthas thus sought to give content to the statutory phrase "relate toany employee benefit plan" by looking to "the objectives of theERISA statute" as a whole. Id. at 656.

The Court has identified two categories of state laws that are subjectto preemption under Section 514(a): first, state laws that specifically"refer to" ERISA plans and, second, state laws that otherwisehave a "connection with" ERISA plans. Dillingham, 519 U.S. at324-325. Not every state law that affects ERISA plans falls into the secondcategory. The category does, however, encompass those state laws that implicateCongress's objective in Section 514(a) "to avoid a multiplicity ofregulation in order to permit the nationally uniform administration of employeebenefit plans." Travelers, 514 U.S. at 657. Such prohibited state lawsinclude, among others, those that regulate "employee benefit structuresor their administration." Id. at 658. By contrast, the state laws thatthe Court has held not to be preempted under that analysis were laws ofgeneral applicability that had only an incidental economic impact on ERISAplans.4 The state statute at issue in this case falls squarely into theprohibited category, because the statute purports to dictate the paymentof benefits under ERISA plans, a matter of plan structure and administration.

1. One of the areas in which Congress has sought "to avoid a multiplicityof [state] regulation in order to permit the nationally uniform administrationof employee benefit plans," Travelers, 514 U.S. at 657, is the conservationand distribution of ERISA plan benefits. That area includes determinationsby ERISA plan administrators as to the proper recipients of benefits payableunder the plan. Congress made the protection of benefits a central purposeof ERISA, established uniform standards to govern the conduct of fiduciarieswho administer the benefits, directed fiduciaries to administer plans (e.g.,to pay benefits) in accordance with the governing plan documents, and definedthe beneficiaries of plan benefits by reference to those documents.

Congress's declared objectives in ERISA include "to protect * ** the interest of participants in employee benefit plans and their beneficiaries"by, inter alia, "establishing standards of conduct, responsibility,and obligation for fiduciaries of employee benefit plans." 29 U.S.C.1001(b); see Boggs, 520 U.S. at 845 (observing that the "principalobject of [ERISA] is to protect plan participants and beneficiaries").To that end, Congress made clear that a fiduciary of an employee benefitplan covered by ERISA "shall discharge his duties with respect to aplan solely in the interest of the participants and beneficiaries"and "for the exclusive purpose of * * * providing benefits to participantsand their beneficiaries" and defraying reasonable administrative expenses.29 U.S.C. 1104(a)(1)(A); see Boggs, 520 U.S. at 846-847 (discussing thoseprovisions).

Congress further delineated the responsibilities of the ERISA plan fiduciaryin Section 404(a)(1) of the Act, 29 U.S.C. 1104(a)(1), by specifying thesource of the governing rules, in addition to those in ERISA itself, forthe fiduciary to apply in administering the plan. Section 404(a)(1) providesthat the fiduciary "shall discharge his duties with respect to a plan* * * in accordance with the documents and instruments governing the planinsofar as such documents and instruments are consistent with the provisionsof [ERISA]." Congress thus contemplated that a fiduciary, in decidingthe myriad questions that arise in the administration of an ERISA plan (includingquestions as to the proper beneficiary of proceeds payable under the plan),would be governed by ERISA itself and by the "documents and instrumentsgoverning the plan." Congress did not also provide that fiduciarieswere to look generally to state law in resolving questions of plan administration.To do so would have been contrary to the central goal of fostering "uniformityof decision" in the administration of ERISA plans, so that "administrators,fiduciaries and participants [may] predict the legality of proposed actionswithout the necessity of reference to varying state laws." H.R. Rep.No. 533, 93d Cong., 1st Sess. 12 (1973) (discussing fiduciary duty provisions).

Congress's understanding that ERISA plan fiduciaries would resolve questionsof plan administration, specifically including questions concerning theproper recipient of benefits under a plan, solely by reference to ERISAand the plan documents is further reflected in the statutory definitionsof "participant" and "beneficiary." The statute definesa "participant" as "any employee or former employee of anemployer, or any member or former member of an employee organization, whois or may become eligible to receive a benefit of any type from an employeebenefit plan which covers employees of such employer or members of suchorganization, or whose beneficiaries may be eligible to receive any suchbenefit." 29 U.S.C. 1002(7). The statute then defines a "beneficiary"as "a person designated by a participant, or by the terms of an employeebenefit plan, who is or may become entitled to a benefit thereunder."29 U.S.C. 1002(8). Congress thus contemplated that the fiduciary, in determiningwhether a person was entitled to receive benefits as a beneficiary underthe plan, would look no further than the participant's beneficiary designationand the documents setting forth the "terms of [the] employee benefitplan."

Moreover, where Congress intended that plan fiduciaries would look beyondthe participant's beneficiary designation to determine the proper recipientof benefits under the plan, Congress expressly so provided in ERISA itself.For example, ERISA requires that pension plans pay a participant's benefitsto an alternate payee in accordance with a state "domestic relationsorder," if that order is submitted to the plan and found to meet thedetailed requirements that ERISA prescribes for a "qualified domesticrelations order" (QDRO). 29 U.S.C. 1056(d)(3).5 If a valid domesticrelations order meeting all of the requirements of Section 1056(d)(3) isdetermined by the plan fiduciary to be "qualified," then the payeeunder the QDRO becomes a beneficiary of the plan as well, whether or nototherwise designated as a beneficiary by the participant. 29 U.S.C. 1056(d)(3)(J)and (K). Similarly, ERISA requires that group health plans provide benefitsto the child of a participant in accordance with a "qualified medicalchild support order" that meets detailed statutory requirements. 29U.S.C. 1169(a) (1994 & Supp. IV 1998). As with a QDRO, a child subjectto such an order is considered a beneficiary of the group medical plan.29 U.S.C. 1169(a)(7). Significantly, although ERISA thus accommodates statedomestic relations orders and medical child support orders, such ordersare not self-executing in their effect on ERISA plans. The determinationwhether a state domestic relations order meets the requirements of a QDROor qualified medical child support order rests with the plan administrator,and benefits are not provided to the alternate payee (of pension plan benefits)or alternate recipient (of medical plan benefits) until the order is foundto be qualified. 29 U.S.C. 1056(d)(3)(G) and (H); 29 U.S.C. 1169(a)(5).See generally Boggs, 520 U.S. at 846-847 (discussing provisions authorizingpayment of benefits pursuant to QDROs and qualified medical child supportorders).6

The provisions of Section 1056(d)(3) (with respect to QDROs) and Section1169(a) (with respect to qualified medical child support orders) confirmthat the distribution of plan benefits is a central federal concern underERISA. They also reflect Congress's understanding that the application ofERISA's general rules--i.e., that ERISA plans are to be administered "inaccordance with the documents and instruments governing the plan,"29 U.S.C. 1104(a)(1)(D), and that beneficiaries are to be determined byreference to the participant's designation or the terms of the plan, 29U.S.C. 1002(8)-in the particular context of marital dissolution is a matterto be addressed in ERISA itself. And Congress has expressly provided thatstate court orders that come within Section 1056(d)(3) and Section 1169(a)are exempted from preemption under Section 514(a). See 29 U.S.C. 1144(b)(7)(1994 & Supp. IV 1998). The clear implications of those provisions arethat state domestic relations laws and orders that purport to direct thepayment of benefits by an ERISA plan in other circumstances are preempted,and, more generally, that Congress did not intend to leave to the Statesthe creation of exceptions to, or special applications of, the general rulethat the determination of beneficiaries is governed by the participant'sdesignation and the plan documents. See generally Boggs, 520 U.S. at 854("The axis around which ERISA's protections revolve is the conceptsof participant and beneficiary. When Congress has chosen to depart fromthis framework, it has done so in a careful and limited manner.");see also Metropolitan Life Ins. Co. v. Pettit, 164 F.3d 857, 862 (4th Cir.1998) (reasoning that the QDRO provision constitutes a "clear signalfrom Congress about what it considers to relate to an ERISA plan" andthus to be exempt from state regulation under Section 514(a)).

2. The state law at issue here, Section 11.07.010 of the Washington RevisedCode, cannot be reconciled with ERISA's central purpose of providing forthe uniform administration of employee benefit plans. Section 11.07.010directly, indeed expressly, regulates the payment of benefits under "[a]payable-on-death provision of a[n] * * * employee benefit plan." Wash.Rev. Code Ann. § 11.07.010(5)(a) (West 1998).7 It "revoke[s]"a participant's designation of his or her spouse as a beneficiary underthe plan if the participant and the spouse divorce after the designationis made. Id. § 11.07.010(2). It purports to control the designationof beneficiaries and the payment of benefits under employee benefit plans,and thus, as explained above, is at the core of Congress's concerns in enactingERISA and its express preemption provision.

Accordingly, this case does not involve a state law, such as those describedin Travelers, 514 U.S. at 661, that has "only a tenuous, remote, orperipheral connection with covered plans." Section 11.07.010 does notmerely have some "indirect economic effect on choices made by * * *ERISA plans." Travelers, 514 U.S. at 659; accord Dillingham, 519 U.S.at 334. Nor is Section 11.07.010 a statute of general application, suchas a tax statute, that merely "impose[s] some burdens on the administrationof ERISA plans." De Buono v. NYSA-ILA Med. & Clinical Servs. Fund,520 U.S. 806, 814-816 (1997). To the contrary, Section 11.07.010 has thepurpose and effect of "dictat[ing] the choices * * * facing ERISA plans,"Dillingham, 519 U.S. at 334, on the fundamental question of who is, andwho is not, the proper recipient of benefits under the plan.8

Section 11.07.010 is thus analogous to one of the state statutes foundto be preempted in Shaw, 463 U.S. at 97, which "require[d] employersto pay employees specific benefits." It is also analogous to the statestatutes found to be preempted in FMC Corp. and Alessi, which, in effect,directed how the net amount of an employee's benefit was to be calculated.See FMC Corp., 498 U.S. at 58-60 (state anti-subrogation statute); Alessi,451 U.S. at 521-526 (state statute prohibiting offset of workers' compensationbenefits against pension benefits); Travelers, 514 U.S. at 657-658 (discussingShaw, FMC Corp., and Alessi); see also UNUM Life Ins. Co. of Am. v. Ward,526 U.S. 358, 366-367 (1999) (noting parties' agreement that state lawsconcerning payment of benefits under an ERISA plan "relates to"the plan within the meaning of Section 514(a)). State laws directing whois to receive benefits under an employee benefit plan "relate to"ERISA plans, within the meaning of Section 514(a), to the same extent asstate laws directing which benefits are to be provided under such plansor how benefits are to be calculated. Section 11.07.010, like the laws inthose earlier cases, is therefore expressly preempted under Section 514(a)of ERISA.

II. The Washington Statute Is Also Preempted Because It Conflicts WithProvisions Of ERISA And Operates To Frustrate The Objects Of ERISA

Section 11.07.010, in its application to the two ERISA plans in thiscase, "conflicts with the provisions of ERISA" and "operatesto frustrate its objects." Boggs, 520 U.S. at 841. Accordingly, asidefrom whether the state statute "relates to" employee benefit planswithin the meaning of Section 514(a), application of the state statute toERISA plans is preempted under ordinary principles of conflict preemption.

1. Section 11.07.010 conflicts with those provisions of ERISA that, whenread in conjunction with the governing plan documents in this case, requirethat plan benefits be paid to the person designated in writing by the planparticipant. Such a conflict exists with respect to both the pension planand the life insurance plan.9

As discussed above (see pp. 13-14, supra), Section 404(a)(1)(D) of ERISAcommands the fiduciary of an ERISA plan to "discharge his duties withrespect to a plan * * * in accordance with the documents and instrumentsgoverning the plan." 29 U.S.C. 1104(a)(1)(D). Section 404(a)(1)(D)necessarily encompasses a fiduciary's determination of the proper beneficiaryunder an ERISA plan. See Varity Corp. v. Howe, 516 U.S. 489, 511 (1996)("{A] plan administrator engages in a fiduciary act when making a discretionarydetermination about whether a claimant is entitled to benefits under theterms of the plan documents."); Central States, S.E. & S.W. AreasPension Fund v. Central Transp., Inc., 472 U.S. 559, 571-572 (1985) ("ERISAclearly assumes * * * that trustees will take steps to identify all participantsand beneficiaries."). That conclusion is confirmed by ERISA's definitionof a "beneficiary" as "a person designated by a participant,or by the terms of an employee benefit plan, who is or may become entitledto a benefit thereunder." 29 U.S.C. 1002(8).

The documents governing the two ERISA plans in this case-like the documentsgoverning many such ERISA plans-provide that benefits are to be paid inaccordance with the participant's written beneficiary designation. The summaryplan description for the pension plan specifically states that the administratorwill recognize only those beneficiaries designated by the participant ona properly filed form; the summary plan description further states thata participant "may not designate or change a beneficiary by using otherdocuments such as divorce decrees, prenuptial agreements, wills or trusts."J.A. 39-40. Similarly, the summary plan description for the life insuranceplan provides that the participant will be asked upon enrollment "todesignate the person or persons you would like to receive benefits underthe [plan] in the event you die while covered," and it specificallydirects participants that "you may change your beneficiary designationat any time by contacting the Boeing Group Insurance Office and completingthe appropriate form." R. 102; see also J.A. 35.10 Those written designationprovisions are of the precise variety contemplated by ERISA's definitionof beneficiary as "a person designated by a participant, or by theterms of an employee benefit plan." 29 U.S.C. 1002(8). There is nodispute that David Egelhoff properly designated petitioner as his beneficiaryin accordance with the documents governing both plans. See Pet. App. 3a.

Thus, "[a]lthough ERISA does not say 'pay only the person whosename is on file', it does say that every plan must act 'in accordance withthe documents and instruments governing' it, 29 U.S.C. § 1104(a)(1)(D),and th[ese] plan[s] ha[ve] a written-designation rule." Fox Valley& Vicinity Constr. Workers Pension Fund v. Brown, 897 F.2d 275, 283(7th Cir.) (en banc) (Easterbrook, J., dissenting), cert. denied, 498 U.S.820 (1990). Section 11.07.010 effectively commands that the benefits underan ERISA plan be paid to somebody other than the person whose name is onfile and who thus is the proper beneficiary under the terms of the plan.Section 11.07.010 thereby directs an outcome that is contrary to the outcomerequired by the plan and ERISA. It therefore is preempted.11

The federal statutory rule of distributing ERISA benefits in accordancewith the plan documents-and thus ordinarily, under an ERISA pension or life-insuranceplan, in accordance with a written beneficiary designation-"fulfillsthe intent of Congress that ERISA plans be uniform in their interpretationand simple in their application." McMillan v. Parrott, 913 F.2d 310,312 (6th Cir. 1990). Such rules enable plan participants, beneficiaries,and administrators to identify their rights and responsibilities with certainty.See Varity Corp., 516 U.S. at 502-503; Curtiss-Wright Corp. v. Schoonejongen,514 U.S. 73, 83-84 (1995). They thereby "yield simple administration,avoid double liability, and ensure that beneficiaries get what's comingquickly, without the folderol essential under less-certain rules."Fox Valley, 897 F.2d at 283 (Easterbrook, J., dissenting) (quoted in McMillan,913 F.2d at 312); see also Pettit, 164 F.3d at 864 (invocation of statelaw to countermand written beneficiary designations "reduce[s] thecertainty of plan administration and increase[s] litigation," thereby"allow[ing] state law to escalate the administrative costs that Congresssought to decrease").12

A federal rule that requires adherence to written beneficiary designationsmight be regarded by some as too rigid in instances, such as those in thiscase, where a participant who had an incentive to change his designationdied before he actually did so. Even in that situation, though, it cannotbe assumed that a plan participant would necessarily have chosen to revokethe designation of the former spouse as beneficiary immediately upon divorce.A participant might, out of feelings of obligation, remorse, or continuingaffection, intend that the former spouse remain as beneficiary, at leastfor the time being. In any event, "whether to have rules (flaws andall) or more flexible standards (with high costs of administration and erraticapplication) is a decision already made" by Congress and the ERISAplans. Fox Valley, 897 F.2d at 284 (Easterbrook, J., dissenting). Section11.07.010 stands as an obstacle to the effectuation of that decision.13

2. Section 11.07.010, in its application to ERISA pension plans, alsoconflicts with Section 206(d)(1) of ERISA, 29 U.S.C. 1056(d)(1), which statesthat "[e]ach pension plan shall provide that benefits provided underthe plan may not be assigned or alienated." Section 206(d)(1) was designed"to safeguard a stream of income for pensioners * * * and their dependents"by ensuring that pension funds are not diverted to other persons. Guidryv. Sheet Metal Workers Nat'l Pension Fund, 493 U.S. 365, 376 (1990). Section206(d)(1) "is mandatory and contains only two explicit exceptions ** *, which are not subject to judicial expansion." Boggs, 520 U.S.at 851. Neither exception is applicable here.14

Section 11.07.010 effects an "alienation" and "assignment,"by operation of law, of a spouse's pension plan benefits upon divorce froma plan participant. See Boggs, 520 U.S. at 851 (noting the regulatory definitionof an "assignment or alienation" as "'[a]ny direct or indirectarrangement whereby a party acquires from a participant or beneficiary'an interest enforceable against a plan to 'all or any part of a plan benefitpayment which is, or may become, payable to the participant or beneficiary'")(quoting 26 C.F.R. 1.401(a)-13(c)(1)(ii)). The statute "revoke[s]"the former spouse's right to the benefits, Wash. Rev. Code Ann. § 11.07.010(2)(a)(West 1998), thereby alienating the benefits from the recipient designatedunder the plan. The statute simultaneously assigns the benefits to anotherperson, i.e., the party to whom the benefits would have passed "ifthe former spouse failed to survive the decedent, having died at the timeof entry" of the divorce decree. Ibid. The statute gives that otherperson certain rights enforceable against the pension plan. Id. § 11.07.010(3)(a)(providing that "[a] payor," e.g., a pension plan, "is liablefor a payment or transfer made" to the former spouse after the payor"has actual knowledge of a revocation under this section," althoughnot otherwise).

It is irrelevant for purposes of preemption analysis that the plan participant,David Egelhoff, could have accomplished a similar result, after his divorcefrom petitioner, by filing an amended beneficiary designation form pursuantto the terms of the pension plan.15 He did not do so. And state law cannot,consistent with ERISA, act in his stead. Cf. Arkansas Louisiana Gas Co.v. Hall, 453 U.S. 571, 580-581 (1981).

3. The conflict in this case between ERISA and state law is similar tothe conflict in Boggs. There, the Court, applying conflict preemption principles,held that ERISA preempted state law that would have allowed the wife ofa pension plan participant to transfer by will her community-property interestin undistributed plan benefits. The wife had died before her husband retired,and thus before the various pension benefits were distributed, leaving herinterest in those benefits to her husband and sons. The husband remarried,retired, and ultimately died, at which time the sons sought to enforce theirasserted state-law interest in the benefits against the second wife. SeeBoggs, 520 U.S. at 836-837.

The Court initially held that the sons' claim to a portion of the secondwife's survivor annuity was preempted, relying principally on 29 U.S.C.1055, which provides that the spouse of a participant is entitled to a survivor'sannuity and that the spouse can waive that entitlement only in a notarizedwritten instrument. Boggs, 520 U.S. at 844. The Court then turned to thesons' claim to other pension plan benefits distributed to their father duringhis retirement. The Court noted that the sons had no right to the plan benefitsunder ERISA itself because the sons were "neither participants norbeneficiaries" under the plan as those terms are defined in the Act.Id. at 848. The Court explicitly declined the sons' invitation to "ignore"ERISA's definition of beneficiary and to permit the use of state law to"create a new class of persons for whom plan assets are to be heldand administered." Id. at 850. The Court added that its "conclusionthat Congress intended to pre-empt [the sons'] nonbeneficiary, nonparticipantinterests in the retirement plans is given specific and powerful reinforcementby the pension plan anti-alienation provision"; the Court explainedthat the first wife's testamentary transfer was "a prohibited 'assignmentor alienation'" because, as of the time that the transfer occurred,the sons "would have acquired * * * an interest in [the father's] pensionplan at the expense of plan participants and beneficiaries." Id. at851-852.16

Similarly, here, Section 11.07.010 "create[s] a new class of personsfor whom plan assets are to be held and administered," 520 U.S. at850-i.e., persons who are neither "participants" in nor "beneficiaries"of the employee benefit plans, as those terms are defined in ERISA, butwho nonetheless are given an enforceable interest under state law in theproceeds of those plans. Moreover, as in Boggs, the fact that such personshave asserted that interest against the recipient of the benefits at issue,rather than against the plan itself, does not eliminate the conflict withERISA. As the Court explained, "[r]eading ERISA to permit nonbeneficiaryinterests, even if not enforced against the plan, would result in troublinganomalies." Id. at 850. For example, the Court observed, "[e]itherpension plans would be run for the benefit of only a subset of those whohave a stake in the plan," because fiduciaries' obligations under ERISArun only to participants and beneficiaries, 29 U.S.C. 1104(a)(1), or "statelaw would have to move in to fill the apparent gaps between plan administrationresponsibilities and ownership rights, resulting in a complex set of requirementsvarying from State to State." 520 U.S. at 850-851. Here, as in Boggs,"[n]either result accords with the [ERISA] statutory scheme."Id. at 851.

4. A number of courts have recognized that ERISA preempts state statutesand court decrees that, like Section 11.07.010, would require, as a consequenceof divorce, that plan benefits be paid to someone other than the beneficiarywho has been properly designated under the plan. See, e.g., Pettit, 164F.3d at 862-863; Metropolitan Life Ins. Co. v. Pressley, 82 F.3d 126, 130(6th Cir. 1996), cert. denied, 520 U.S. 1263 (1997); MacAnally v. Levin,No. 99CA0120, 2000 WL 328723 (Colo. Ct. App. Mar. 30, 2000). Some of thosecourts have, however, created federal common law rules, often with referenceto the rejected state law, under which benefits are payable to other personsin accordance with perceived public policy or equitable considerations.See, e.g., Equitable Life Assurance Soc'y of the United States v. Crysler,66 F.3d 944, 948-950 (8th Cir. 1995); Brandon v. Travelers Ins. Co., 18F.3d 1321, 1325-1326 (5th Cir. 1994), cert. denied, 513 U.S. 1081 (1995);Fox Valley, 897 F.2d at 281.

Those courts' resort to federal common law is misguided. As explainedabove, ERISA itself supplies the applicable rules of law in this area. Congresshas articulated the general rules that all ERISA plans be administered "inaccordance with the documents and instruments governing the plan,"29 U.S.C. 1104(a)(1)(D); that the beneficiary of an ERISA plan is the "persondesignated by a participant, or by the terms of an employee benefit plan,"29 U.S.C. 1002(8); and that benefits under ERISA pension plans are not tobe "assigned or alienated" away from participants and their beneficiaries,29 U.S.C. 1056(d)(1). Congress has also established special applicationsof those general rules, such as in the provisions for QDROs and qualifiedmedical child support orders, that take account of state laws and ordersto the extent, and in the manner, that Congress deemed appropriate. See29 U.S.C. 1056(d); 29 U.S.C. 1169(a) (1994 & Supp. IV 1998).

Resort to federal common law to create other special applications of,or exceptions to, those statutory rules requiring the payment of ERISA benefitsto participants and their designated beneficiaries would be in derogationof ERISA. See Pressley, 82 F.3d at 130; Krishna v. Colgate Palmolive Co.,7 F.3d 11, 15-16 (2d Cir. 1993) (declining to create a federal common lawrule to resolve competing claims for benefits under an ERISA plan); seegenerally Guidry, 493 U.S. at 376 ("[C]ourts should be loath to announceequitable exceptions to legislative requirements or prohibitions that areunqualified by the statutory text.").17 Moreover, in cases involvingclaims by non-beneficiary former spouses or dependent children, who couldhave obtained a QDRO to protect their rights to benefits under an ERISAplan, a federal common law right to benefits would "reduce the QDROprovisions to a meaningless footnote." Pettit, 164 F.3d at 864. Accordingly,while we do not rule out resort to background legal principles to resolveclaims for ERISA benefits that arise in truly unusual circumstances unlikelyto have been contemplated by Congress or the drafters of ERISA plans,18this case presents no such circumstances.

CONCLUSION

The judgment of the Supreme Court of Washington should be reversed.

Respectfully submitted.

SETH P. WAXMAN
Solicitor General
DAVID W. OGDEN
Assistant Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
BARBARA MCDOWELL
Assistant to the Solicitor
General
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

HENRY L. SOLANO
Solicitor of Labor
NATHANIEL I. SPILLER
Deputy Associate Solicitor
ELIZABETH HOPKINS
Attorney
Department of Labor
Washington, D.C. 20210

 

AUGUST 2000

1 The court of appeals found it unnecessary to address respondents' alternativeargument that, under the property settlement incorporated into the divorcedecree, petitioner "waived" her rights to the pension proceeds.Pet. App. 31a-32a n.7. The Washington Supreme Court likewise did not addressthe "waiver" issue. Id. at 27a.

2 For instance, the insurance savings clause, 29 U.S.C. 1144(b)(2)(A),exempts from preemption those state laws that "regulate[] insurance."Respondents have not, to our knowledge, claimed that Section 11.07.010 isso saved, and we assume that Section 11.07.010, which by its terms is notdirected solely at insurance companies, is not an insurance regulation.See UNUM Life Ins. Co. of Am. v. Ward, 526 U.S. 358, 368 (1999).

3 See also Shaw, 463 U.S. at 99 (quoting 120 Cong. Rec. 29,933 (1974)(remarks of Senator Williams) ("It should be stressed that with thenarrow exceptions specified in the bill, the substantive and enforcementprovisions of the conference substitute are intended to preempt the fieldfor Federal regulations, thus eliminating the threat of conflicting or inconsistentState and local regulation of employee benefit plans.")); ibid. (quoting120 Cong. Rec. 29,197 (1974) (remarks of Representative Dent) (the "crowningachievement" of ERISA is "the reservation to Federal authoritythe sole power to regulate the field of employee benefit plans"));id. at 99-100 n.29 (quoting 120 Cong. Rec. 29,942 (1974) (remarks of SenatorJavits)).

4 See Travelers, 514 U.S. at 659 (describing state law that imposed asurcharge on hospital patients who were insured by commercial insurers otherthan Blue Cross-Blue Shield as having only "an indirect economic effecton choices made by insurance buyers, including ERISA plans"); see alsoDe Buono v. NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S. 806, 810-816(1997) (state tax imposed on all hospitals, including those operated byERISA plan); Dillingham, 519 U.S. at 330 (state law that required all contractorson state construction projects to pay the prevailing wage, with an exceptionfor state-approved apprenticeship programs, whether or not operated as anERISA plan); Mackey v. Lanier Collection Agency & Serv., 486 U.S. 825,831-836 (1988) (state garnishment law of general applicability).

5 E RISA defines a "domestic relations order" as a judgment,decree, or order that "relates to the provision of child support, alimonypayments, or marital property rights to a spouse, former spouse, child,or other dependent of a participant" and is "made pursuant toa State domestic relations law." 29 U.S.C. 1056(d)(3)(B)(ii). A "qualifieddomestic relations order" is defined as a domestic relations orderthat "creates or recognizes the existence of an alternate payee's rightto, or assigns to an alternate payee the right to, receive all or a portionof the benefits payable with respect to a participant under a plan,"29 U.S.C. 1056(d)(3)(B)(i)(I), and that meets certain substantive requirementsspelled out in 29 U.S.C. 1056(d)(3)(C) and (D). See also 29 U.S.C. 1056(d)(3)(B)(i)(II).

6 Another provision of ERISA, 29 U.S.C. 1055(c)(2), also looks beyondparticipants' beneficiary designations in order to provide protection tosurviving spouses. That provision requires that a spouse consent in writingto certain choices by the participant that would deprive the spouse of thesurvivor's annuity that is otherwise mandated by 29 U.S.C. 1055(a). SeeBoggs, 520 U.S. at 842 (discussing that provision).

7 Arguably, the state statute's express reference to "employee benefitplan[s]" is sufficient, in itself, to warrant preemption as a statutethat "refers to," and thus necessarily "relates to,"such plans. See Mackey, 486 U.S. at 830 (holding that a "state statute'sexpress reference to ERISA plans suffices to bring it within the federallaw's preemptive reach"). The Court has observed, however, that a statelaw that refers to ERISA plans is preempted on that ground if it "actsimmediately and exclusively upon ERISA plans" or "the existenceof ERISA plans is essential to the law's operation." Dillingham, 519U.S. at 325. Section 11.07.010 does not apply exclusively to employee benefitplans, and the existence of an ERISA plan is not in all instances essentialto its operation. The state statute also applies, for example, to the "payable-on-deathprovision" of a life insurance policy, an annuity or similar contract,and an individual retirement account. Wash. Rev. Code Ann. § 11.07.010(5)(a)(West 1998). But whether or not the express reference to "employeebenefit plan[s]" in the state statute is sufficient in itself to requirepreemption under Section 514(a), that reference makes clear that the statestatute's effect on ERISA plans is not merely incidental, as was true ofthe laws of general applicability that this Court has found not to be preempted.See pp. 11-12 & n.4, supra.

8 Section 11.07.010 is likewise unlike the general garnishment statuteupheld against a preemption challenge in Mackey. See 486 U.S. at 831-840.That statute did not purport to dictate the choices made by ERISA plan administrators.It merely provided a mechanism for the collection of money judgments thathad been obtained, in proceedings unrelated to employee benefits, againstpersons who concededly were participants under the terms of an ERISA welfarebenefit plan.

9 In its brief amicus curiae in the Washington Supreme Court, the governmentargued that Section 11.07.010 is expressly preempted by Section 514(a) ofERISA in its application to both pension plans and welfare benefit plans.Pet. App. 56a-60a. That brief also argued that Section 11.07.010 conflictswith ERISA's anti-alienation provision, 29 U.S.C. 1056(d)(1), with respectto pension plans but not to welfare benefit plans, such as the life insuranceplan here. See Pet. App. 52a. On further reflection, we have concluded thatSection 11.07.010 also conflicts with additional provisions of ERISA thatare applicable to both plans.

10 The "documents * * * governing the plan," within the meaningof Section 404(a)(1)(D), include summary plan descriptions. See Curtiss-WrightCorp. v. Schoonejongen, 514 U.S. 73, 83-84 (1995); see also 29 U.S.C. 1024(b);29 C.F.R. Pt. 2520, Subpart B (regulations governing summary plan descriptions).

11 Cf. Arkansas La. Gas Co. v. Hall, 453 U.S. 571 (1981) (regulated utilitymay charge only its filed rate, and state law departing from that filedrate is preempted).

12 The prospect that ERISA plans could incur double liability under statelaws such as Section 11.07.010 is a real one. As the court of appeals noted,for example, if respondents had made a proper demand on the administratorof the life insurance plan, respondents could sue to recover the life insuranceproceeds from the insurer, even though the insurer had already paid theproceeds to petitioner in accordance with the terms of the plan. Pet. App.42a-44a & nn.16,18; see Wash. Rev. Code Ann. § 11.07.010(3)(a)(West 1998). Thus, an administrator may potentially be subject to conflictingobligations to pay each of the competing claimants-a situation in which"compliance with both federal and state regulations is a physical impossibility."Boggs, 520 U.S. at 844. If the administrator paid the proceeds to petitioner,the administrator could be subject to suit by respondents under state law;and if the administrator paid the proceeds to respondents, the administratorcould be subject to suit by petitioner under ERISA. See 29 U.S.C. 1132(a)(1)-(3)(authorizing ERISA plan participants and beneficiaries to sue to "recoverbenefits due * * * under the terms of the plan," to obtain damagesfor breaches of fiduciary duty, and to obtain equitable relief to redressstatutory violations or "to enforce * * * the terms of the plan").

13 We do not, however, read Section 404(a)(1) to "enable employersto avoid any state law simply be referring to that law in [their] ERISAplan." Hook v. Morrison Milling Co., 38 F.3d 776, 785 (5th Cir. 1994)(refusing to give preemptive effect to provision in ERISA welfare plan purportingto waive employee's rights to bring negligence suit).

14 The first exception, embodied in 29 U.S.C. 1056(d)(2), allows "anyvoluntary and revocable assignment of not to exceed 10 percent of any benefitpayment," or other assignments executed before the effective date ofERISA, and allows the use of benefits to secure a loan to a participantor a beneficiary. The second exception, embodied in 29 U.S.C. 1056(d)(3)(A),applies to payments of benefits pursuant to a QDRO. See pp. 14-17, supra(discussing QDRO provision).

15 Section 11.07.010, by its terms, does not apply where a divorce decree"requires that the decedent maintain a nonprobate asset for the benefitof a former spouse or children of the marriage." Wash. Rev. Code Ann.§ 11.07.010(2)(b)(ii) (West 1998). It thus would appear not to applyin the circumstances covered by the QDRO provision of ERISA.

16 The Court's central rationale in Boggs, i.e., that state law cannotcreate a class of persons for whom ERISA plan benefits are held and administered,520 U.S. at 850, is equally applicable to all ERISA plans, both pensionplans (the only sort of plan at issue in that case) and welfare benefitplans, although that rationale was "reinforce[d]" in Boggs, id.at 851, by the anti-alienation provision applicable only to the former.

17 The same problems pertain with respect to the use of a constructivetrust theory to obtain the benefits. See Pettit, 164 F.3d at 864. The assumptionunderlying such a trust is that the alternate claimant, not the designatedbeneficiary, was always entitled to the benefits, and thus could have madea direct claim against the plan. Cf. Harris Trust & Sav. Bank v. SalomonSmith Barney Inc., 120 S. Ct. 2180, 2189-2190 (2000).

18 For instance, it might well be appropriate to consider the well-establishedlegal principle that "[n]o person should be permitted to profit fromhis own wrong" if a murderer asserted a claim to benefits as the namedbeneficiary under the victim's ERISA plan. See Prudential Life Ins. Co.v. Tull, 690 F.2d 848, 849 (4th Cir. 1982) (applying that principle to aninsurance policy issued under Servicemen's Group Life Insurance Act); seealso Priv. Ltr. Rul. 89-08-063 (Feb. 24, 1989) (applying the principle thata murderer cannot profit from his victim's death in the ERISA context).It might reasonably be argued that an exception for that situation, reflectinga recognized background principle of the law, is implicit in ERISA and theplans governed by it. However, in general, ERISA would operate to preemptapplication of the specific state law in this area, although such a lawmight in some circumstances be saved from preemption as an insurance regulation.See New Orleans Elec. Pension Fund v. DeRocha, 779 F. Supp. 845, 849-850(E.D. La. 1991) (state slayer statute saved as insurance regulation; alternativelyapplying federal common law to reach same result). In any event, the Court"need not presently address the legal aspects of extreme fact situationsor of instances where the beneficiary has obtained the proceeds throughfraudulent or illegal means as, for example, where the named beneficiarymurders the insured." Ridgway v. Ridgway, 454 U.S. 46, 60 n.9 (1981).

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