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When Does ERISA Apply to a Claim?

Employees and claimants in Chicago involved in ERISA litigation frequently ask when ERISA applies to a claim and where a lawsuit must be filed. Whether ERISA applies is answered by ERISA’s preemption statute, 29 U.S.C. § 1144(a). That statute states ERISA “shall supersede any and all State laws insofar as the may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title.” But what does it mean to “relate to” an employee benefit plan? Courts employ a two-part analysis devised in Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) to determine whether a claim is completely preempted. Under that test, “if an individual, at some point in time, could have brought his claim under ERISA § 502(a)(1)(B), and where there is no other independent legal duty that is implicated by a defendant’s actions, then the individual’s cause of action is completely pre-empted b ERISA § 502(a)(1)(B).” A recent case wielded this test to demonstrate how it applies in real life.

In King v. King, No. 3:23-cv-355, 2023 WL 3346974 (S.D. Ill. May 10, 2023), After Shaun King died, Lincoln National Life Insurance Company distributed life insurance policy proceeds to his named beneficiary, his ex-wife, Angela. Shaun’s daughter, Shaunice, sued Angela and Lincoln in state court alleging the distribution was in conflict with the terms of Shaun and Angela’s divorce decree. Angela and Lincoln removed the case to federal court, asserting ERISA § 502(a)(1)(B) completely preempted Shaunice’s claim. Shaunice moved to remand to state court.

The United States District Court for the Southern District of Illinois denied the motion to remand. The court determined the two-part test from Davila applied because Shaunice had a colorable claim as a beneficiary of the life insurance, and could have brought her claim under ERISA § 502(a)(1)(B). It also found both state law claims were based on the existence of the ERISA-governed life insurance policy and sought payment of proceeds from that policy. Thus, ERISA completely preempted Shaunice’s claims.

If you have a claim that relates to the ERISA governed plan, contact an experienced ERISA attorney today.

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