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 non-moving 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[1] 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).[2] 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.
-----------------------
[1] 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.
[2] 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.’”).
Midwest Security Life Insurance v. Stroup
Combined Opinion