140 F.4th 96
2d Cir.2025Background
- Office Create Corp. obtained a money judgment against Planet Entertainment, LLC and Steve Grossman following an arbitration award, which was confirmed by the District Court.
- To enforce the judgment, Office Create sought to restrain certain Merrill Lynch retirement accounts purportedly owned or controlled by Grossman.
- Grossman and Planet Entertainment claimed these accounts were protected by ERISA's anti-alienation provision, thus exempt from collection, and further argued that ERISA preempts the relevant New York law (NYCPLR §5205(c)(5)), which would otherwise allow judgment enforcement against certain retirement account contributions.
- The District Court held that Office Create failed to demonstrate the accounts were not ERISA-qualified, and ruled that ERISA preempts New York's exception, denying Office Create's objection to the exemption.
- Office Create appealed both on the exemption issue and the related preemption argument, and also challenged appellate jurisdiction, which was resolved when Office Create withdrew its request for further hearings, making the District Court order final.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does ERISA preempt NYCPLR §5205(c)(5), barring collection from ERISA pension accounts to satisfy a judgment? | NYCPLR §5205(c)(5) exception allows restraint of retirement accounts for certain recent contributions, so the assets are subject to collection. | ERISA’s anti-alienation provision is supreme and preempts the New York law, making the accounts exempt from collection, as they are ERISA-qualified. | ERISA does preempt; NYCPLR §5205(c)(5) cannot be used to seize these funds. |
Key Cases Cited
- Maryland v. Louisiana, 451 U.S. 725 (federal law preempts conflicting state law via Supremacy Clause)
- Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (state law relates to ERISA plan if it has a connection with or reference to such a plan)
- Boggs v. Boggs, 520 U.S. 833 (ERISA anti-alienation strongly protects pension funds)
- Guidry v. Sheet Metal Workers Nat’l Pension Fund, 493 U.S. 365 (ERISA bars garnishment of pension plan benefits)
- Arizona v. United States, 567 U.S. 387 (state law preempted if it stands as an obstacle to federal law)