ALFRED GOBEILLE, IN HIS OFFICIAL CAPACITY AS CHAIR OF THE VERMONT GREEN MOUNTAIN CARE BOARD, PETITIONER
LIBERTY MUTUAL INSURANCE COMPANY
S.Ct. 938] December 2, 2015, Argued
WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SECOND CIRCUIT
S.Ct. 939] [194 L.Ed.2d 26] Vermont law requires certain
entities, including health insurers, to report payments
relating to health care claims and other information relating
to health care services to a state agency for compilation in
an all-inclusive health care database. Respondent Liberty
Mutual Insurance Company's health plan (Plan), which
provides benefits in all 50 States, is an " employee
welfare benefit plan" under the Employee Retirement
Income Security Act of 1974 (ERISA). The Plan's
third-party administrator, Blue Cross Blue Shield of
Massachusetts, Inc. (Blue Cross), which is subject to
Vermont's disclosure statute, was ordered to transmit its
files on eligibility, medical claims, and pharmacy claims for
the Plan's Vermont members. Respondent, concerned that
the disclosure of such confidential information might violate
its fiduciary duties, instructed Blue Cross not to comply and
filed suit, seeking a declaration that ERISA pre-empts
application of Vermont's statute and regulation to the
Plan and an injunction prohibiting Vermont from trying to
acquire data about the Plan or its members. The District
Court granted summary judgment to Vermont, but the Second
Circuit reversed, concluding that Vermont's reporting
scheme is pre-empted by ERISA.
ERISA pre-empts Vermont's statute as applied to ERISA
plans. Pp. 5-13.
ERISA expressly pre-empts " any and all State laws
insofar as they may now or hereafter relate to any employee
benefit plan." 29 U.S.C. § 1144(a). As relevant
here, the clause pre-empts a state law that has an
impermissible " connection with" ERISA plans,
i.e., a law that governs, or interferes with the
uniformity of, plan administration. Egelhoff v.
Egelhoff, 532 U.S. 141, 148, 121 S.Ct. 1322, 149
L.Ed.2d 264. Pp. 5-6.
The considerations relevant to the determination whether an
impermissible connection exists -- ERISA's objectives
" as a guide to the scope of the state law that
Congress understood would survive," New York State
Conference of Blue Cross & Blue Shield Plans v.
Travelers Ins. Co., 514 U.S. 645, 656, 115 S.Ct.
1671, 131 L.Ed.2d 695, and " the nature of" the
state law's " effect . . . on ERISA plans,"
California Div. of Labor Standards Enforcement v.
Dillingham [194 L.Ed.2d 27] Constr., N. A.,
Inc., 519 U.S. 316, 325, 117 S.Ct. 832, 136 L.Ed.2d
791-- lead to the conclusion that Vermont's regime, as
applied to ERISA plans, is pre-empted. Pp. 6-12.
ERISA seeks to make the benefits promised by an employer
more secure by mandating certain oversight systems and
other standard procedures, Travelers, 514 U.S. at
651, 115 S.Ct. 1671, 131 L.Ed.2d 695, and those systems and
procedures are intended to be uniform, id., at
656, 115 S.Ct. 1671, 131 L.Ed.2d 695. ERISA's extensive
reporting, disclosure, and recordkeeping requirements are
central to, and an essential part of, this uniform plan
administration system. Vermont's law and regulation,
however, also govern plan reporting, disclosure, and
recordkeeping. Pre-emption is necessary in order to prevent
multiple jurisdictions from imposing differing, or even
parallel, regulations, creating wasteful administrative
costs and threatening to subject plans to wide-ranging
liability. ERISA's uniform rule design also makes clear
that it is the Secretary of Labor, not the separate States,
that is authorized to decide whether to exempt plans from
ERISA reporting requirements or to require ERISA plans [136
S.Ct. 940] to report data such as that sought by Vermont.
Vermont's counterarguments are unpersuasive. Vermont
argues that respondent has not shown that the State scheme
has caused it to suffer economic costs, but respondent need
not wait to bring its pre-emption claim until confronted
with numerous inconsistent obligations and encumbered with
any ensuing costs. In addition, the fact that ERISA and the
state reporting scheme have different objectives does not
transform Vermont's direct regulation of a fundamental
ERISA function into an innocuous and peripheral set of
additional rules. Vermont's regime also cannot be saved
by invoking the State's traditional power to regulate
in the area of public health. Pp. 10-12.
ERISA's pre-existing reporting, disclosure, and
recordkeeping provisions maintain their pre-emptive force
regardless of whether the new Patient Protection and
Affordable Care Act's reporting obligations also
pre-empt state law. Pp. 12-13.
746 F.3d 497, affirmed.
C. Asay argued the cause for petitioner.
Bash argued the cause for the United States, as amicus
curiae, by special leave of court.
Waxman argued the cause for respondent.
J., delivered the opinion of the Court, in which ROBERTS, C.
J., and THOMAS, BREYER, ALITO, and KAGAN, JJ., joined.
THOMAS, J., and BREYER, J., filed concurring opinions.
GINSBURG, J., filed a dissenting opinion, in which SOTOMAYOR,
case presents a challenge to the applicability of a state law
requiring disclosure of payments relating to health care
claims and other information relating to health care
services. Vermont enacted the statute so it could maintain an
all-inclusive health care database. Vt. Stat. Ann., Tit. 18,
§ 9410(a)(1) (2015 Cum. Supp.) ( V. S. A.). The state
law, by its terms, applies [194 L.Ed.2d 28] to health plans
established by employers and regulated by the Employee
Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829,
as amended, 29 U.S.C. § 1001 et seq. The
question before the Court is whether ERISA pre-empts the
Vermont statute as it applies to ERISA plans.
requires certain public and private entities that provide and
pay for [136 S.Ct. 941] health care services to report
information to a state agency. The reported information is
compiled into a database reflecting " all health care
utilization, costs, and resources in [ Vermont], and health
care utilization and costs for services provided to Vermont
residents in another state." 18 V. S. A. § 9410(b).
A database of this kind is sometimes called an all-payer
claims database, for it requires submission of data from all
health insurers and other entities that pay for health care
services. Almost 20 States have or are implementing similar
databases. See Brief for State of New York et al. as
Amici Curiae 1, and n. 1.
law requires health insurers, health care providers, health
care facilities, and governmental agencies to report any
" information relating to health care costs, prices,
quality, utilization, or resources required" by the
state agency, including data relating to health insurance
claims and enrollment. § 9410(c)(3). Health insurers
must submit claims data on members, subscribers, and
policyholders. § 9410(h). The Vermont law defines health
insurer to include a " self-insured . . . health care
benefit plan," § 9402(8), as well as " any
third party administrator" and any " similar entity
with claims data, eligibility data, provider files, and other
information relating to health care provided to a Vermont
resident." § 9410( j)(1)(B). The database must be
made " available as a resource for insurers, employers,
providers, purchasers of health care, and State agencies to
continuously review health care utilization, expenditures,
and performance in Vermont." § 9410(h)(3)(B).
law leaves to a state agency the responsibility to "
establish the types of information to be filed under this
section, and the time and place and the manner in which such
information shall be filed." § 9410(d). The law has
been implemented by a regulation creating the Vermont
Healthcare Claims Uniform Reporting and Evaluation System.
The regulation requires the submission of " medical
claims data, pharmacy claims data, member eligibility data,
provider data, and other information," Reg. H-2008-01,
Code of Vt. Rules 21-040-021, § 4(D) (2016) (CVR), in
accordance with specific formatting, coding, and other
requirements, § 5. Under the regulation, health insurers
must report data about the health care services provided to
Vermonters regardless of whether they are treated in Vermont
or out-of-state and about non-Vermonters who are treated in
Vermont. § 4(D); see also § 1. The agency at
present does not collect data on denied claims, §
5(A)(8), but the statute would allow it to do so.
entities (reporters) must register with the State and must
submit data monthly, quarterly, or annually, depending on the
number of individuals that an entity serves. The more people
served, the more frequently the reports must be filed. §
§ 4, [194 L.Ed.2d 29] 6(I). Entities with fewer than 200
members need not report at all, ibid., and are
termed " voluntary" reporters as distinct from
" mandated" reporters, § 3. Reporters can be
fined for not complying with the statute or the regulation.
§ 10; 18 V. S. A. § 9410(g).
Liberty Mutual Insurance Company maintains a health plan
(Plan) that provides benefits in all 50 States to over 80,000
individuals, comprising respondent's employees, their
families, and former employees. The Plan is self-insured and
self-funded, which means that Plan benefits are paid by
respondent. The Plan, which qualifies as an " employee
welfare benefit plan" under ERISA, 29 U.S.C. §
1002(1), is subject to " ERISA's comprehensive
regulation," New York State Conference of Blue Cross
& Blue Shield Plans [136 S.Ct. 942] v. Travelers
Ins. Co., 514 U.S. 645, 650, 115 S.Ct. 1671, 131 L.Ed.2d
695 (1995). Respondent, as the Plan sponsor, is both a
fiduciary and plan administrator.
Plan uses Blue Cross Blue Shield of Massachusetts, Inc. (Blue
Cross) as a third-party administrator. Blue Cross manages the
" processing, review, and payment" of claims for
respondent. Liberty Mut. Ins. Co. v.
Donegan, 746 F.3d 497, 502 (CA2 2014) (case below).
In its contract with Blue Cross, respondent agreed to "
hold [Blue Cross] harmless for any charges, including legal
fees, judgments, administrative expenses and benefit payment
requirements, . . . arising from or in connection with [the
Plan] or due to [respondent's] failure to comply with any
laws or regulations." App. 82. The Plan is a voluntary
reporter under the Vermont regulation because it covers some
137 Vermonters, which is fewer than the 200-person cutoff for
mandated reporting. Blue Cross, however, serves several
thousand Vermonters, and so it is a mandated reporter. Blue
Cross, therefore, must report the information it possesses
about the Plan's members in Vermont.
August 2011, Vermont issued a subpoena ordering Blue Cross to
transmit to a state-appointed contractor all the files it
possessed on member eligibility, medical claims, and pharmacy
claims for Vermont members. Id., at 33. (For
clarity, the Court uses " Vermont" to refer not
only to the State but also to state officials acting in their
official capacity.) The penalty for noncompliance, Vermont
threatened, would be a fine of up to $2,000 a day and a
suspension of Blue Cross' authorization to operate in
Vermont for as long as six months. Id., at 31.
Respondent, concerned in part that the disclosure of
confidential information regarding its members might violate
its fiduciary duties under the Plan, instructed Blue Cross
not to comply. Respondent then filed this action in the
United States District Court for the District of Vermont. It
sought a declaration that ERISA pre-empts application of
Vermont's statute and regulation to the Plan and an
injunction forbidding Vermont from trying to acquire data
about the Plan or its members.
filed a motion to dismiss, which the District Court treated
as one for summary judgment, see Fed. Rule Civ. Proc. 12(d),
and respondent filed a cross-motion for summary judgment. The
District Court granted summary judgment to Vermont. It first
held that respondent, despite being a mere voluntary
reporter, had [194 L.Ed.2d 30] standing to sue because it was
faced with either allegedly violating its " fiduciary
and administrative responsibilities to the Plan" or
assuming liability for Blue Cross' withholding of the
data from Vermont. Liberty Mut. Ins. Co. v.
Kimbell, No. 2:11-cv-204, *14, (D Vt., Nov. 9,
2012). The District Court then concluded that the State's
reporting scheme was not pre-empted. Although that scheme
" may have some indirect effect on health benefit
plans," the court reasoned that the " effect is so
peripheral that the regulation cannot be considered an
attempt to interfere with the administration or structure of
a welfare benefit plan." Id., at *38.
Court of Appeals for the Second Circuit reversed. The panel
was unanimous in concluding that respondent had standing, but
it divided on the merits of the pre-emption challenge. The
panel majority explained that " one of ERISA's core
functions -- reporting -- [cannot] be laden with burdens,
subject to incompatible, multiple and variable demands, and
freighted with risk of fines, breach of duty, and legal
expense." 746 F.3d, at 510. The Vermont regime, the
court held, does just that. Id., at 508-510.
S.Ct. 943] This Court granted certiorari to address the
important issue of ERISA pre-emption. 576 U.S. ___, 135 S.Ct.
2887, 192 L.Ed.2d 923 (2015).
text of ERISA's express pre-emption clause is the
necessary starting point. It is terse but comprehensive.
" any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan." 29
U.S.C. § 1144(a).
Court has addressed the potential reach of this clause
before. In Travelers, the Court observed that "
[i]f 'relate to' were taken to extend to the furthest
stretch of its indeterminacy, then for all practical purposes
pre-emption would never run its course." 514 U.S. at
655, 115 S.Ct. 1671, 131 L.Ed.2d 695. That is a result "
no sensible person could have intended." California
Div. of Labor Standards Enforcement v. Dillingham
Constr., N. A., Inc., 519 U.S. 316, 336, 117 S.Ct. 832,
136 L.Ed.2d 791 (1997) (Scalia, J., concurring). So the need
for workable standards has led the Court to reject "
uncritical literalism" in applying the clause.
Travelers, 514 U.S. at 656, 115 S.Ct. 1671, 131
these principles, the Court's case law to date has
described two categories of state laws that ERISA pre-empts.
First, ERISA pre-empts a state law if it has a "
'reference to'" ERISA plans. Ibid. To
be more precise, " [w]here a State's law acts
immediately and exclusively upon ERISA plans . . . or where
the existence of ERISA plans is essential to the law's
operation . .., that 'reference' will result in
pre-emption." Dillingham, supra, at
325, 117 S.Ct. 832, 136 L.Ed.2d 791. Second, ERISA pre-empts
a state law that has an impermissible " connection
with" ERISA plans, meaning a state law that "
governs . . . a central matter of plan administration"
or " interferes with nationally uniform plan
administration." Egelhoff v. Egelhoff,
532 U.S. 141, 148, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001). A
state law also [194 L.Ed.2d 31] might have an impermissible
connection with ERISA plans if " acute, albeit indirect,
economic effects" of the state law " force an ERISA
plan to adopt a certain scheme of substantive coverage or
effectively restrict its choice of insurers."
Travelers, supra, at 668, 115 S.Ct. 1671,
131 L.Ed.2d 695. When considered together, these formulations
ensure that ERISA's express pre-emption clause receives
the broad scope Congress intended while avoiding the
clause's susceptibility to limitless application.
contends that Vermont's law falls in the second category
of state laws that are pre-empted by ERISA: laws that govern,
or interfere with the uniformity of, plan administration and
so have an impermissible " 'connection
with'" ERISA plans. Egelhoff,
supra, at 148, 121 S.Ct. 1322, 149 L.Ed.2d 264;
Travelers, 514 U.S. at 656, 115 S.Ct. 1671, 131
L.Ed.2d 695. When presented with these contentions in earlier
cases, the Court has considered " the objectives of the
ERISA statute as a guide to the scope of the state law that
Congress understood would survive," ibid., and
" the nature of the effect of the state law on ERISA
plans," Dillingham, supra, at 325, ...