Sherfel v. Gassman
2012 WL 4499245
S.D. Ohio2012Background
- ERISA plan status challenged: Nationwide Plan argued to be an ERISA welfare benefit plan funded via a Trust; the Plan’s administrator is the Benefits Administrative Committee.
- WFMLA substitution provision in Wisconsin law allows substitution of paid leave for unpaid WFMLA leave, potentially requiring STD benefits to be paid by plan assets.
- Gerum v. Nationwide (ERD case) held Nationwide’s STD benefits could be substituted for WFMLA leave, ordering payment from the Trust; this prompted nationwide pre-emption questions.
- ERD/ALJ proceedings and Wisconsin administrative process involved determinations that affect plan administration and eligibility decisions under the Plan.
- Nationwide and Committee filed this federal action seeking declaratory and injunctive relief to prevent WFMLA substitution from overriding Plan terms and ERISA fiduciary duties.
- Court already determined standing and jurisdiction; trial on the merits concluded with findings that the WFMLA substitution provision pre-empts ERISA and that an injunction is appropriate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ERISA plan existence | Plan is an ERISA plan | No ERISA plan under scheme | Plan qualifies as ERISA plan |
| Eleventh Amendment immunity | Ex parte Young allows prospective relief | Eleventh Amendment bars suit | Eleventh Amendment does not bar claims in this context |
| ERISA pre-emption of WFMLA substitution | WFMLA substitution is pre-empted when it forces ERISA-plan benefits | WFMLA substitution operates independently of ERISA | WFMLA substitution pre-empted under ERISA §1144(a) and conflict pre-emption |
| Saving clauses (2651(b) and 1144(d)) | Saving clauses protect state law rights | Saving clauses save WFMLA substitution from pre-emption | Saving clauses do not save WFMLA substitution from ERISA pre-emption |
| Permanent injunction | Injunction necessary to prevent ongoing ERISA-preemption harm | No injunction needed or appropriate | Permanent injunction granted to prevent substitution claims against the Plan |
Key Cases Cited
- Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (U.S. 1983) (ERISA pre-emption scope and relation-to/federal-regulation considerations)
- Davila v. Metropolitan Life Insurance Co., 542 U.S. 200 (U.S. 2004) (ERISA pre-emption and saving clauses; exclusive remedial scheme)
- Egelhoff v. Egelhoff, 532 U.S. 141 (U.S. 2001) (prohibited connection where state law dictates plan beneficiary status)
- Travelers Health v. Blue Cross & Blue Shield Plans, 514 U.S. 645 (U.S. 1995) (interpretation of 'relate to' and pre-emption breadth)
- Massachusetts v. Morash, 490 U.S. 107 (U.S. 1989) (ERISA pre-emption and funding/plan structure considerations)