CENTRAL LABORERS’ PENSION FUND, NORTH CENTRAL ILLINOIS LABORERS’ HEALTH AND WELFARE FUND, NORTHERN ILLINOIS ANNUITY FUND, ILLINOIS LABORERS’ AND CONTRACTORS JOINT APPRENTICESHIP AND TRAINING FUND, MIDWEST REGION FOUNDATION FOR FAIR CONTRACTING, INC., NORTHERN ILLINOIS WELFARE FUND, INDUSTRY ADVANCEMENT FUND, LABORERS‘-EMPLOYERS COOPERATION EDUCATION TRUST, VACATION FUND, MARKET PROMOTION FUND, ORGANIZATION FUND, аnd LABORERS’ LOCAL 32, Plaintiffs-Appellants, v. NICHOLAS AND ASSOCIATES, INC., Defendants-Appellees (KMC Masonry, LLC, Defendant; The State of Illinois, Intervenor-Appellant).–LABORERS’ PENSION FUND, LABORERS’ WELFARE FUND OF THE HEALTH AND WELFARE DEPARTMENT OF THE CONSTRUCTION AND GENERAL LABORERS’ DISTRICT COUNCIL OF CHICAGO AND VICINITY, and JAMES S. JORGENSEN, Administrator of the Funds, Plaintiffs-Appellants, v. NICHOLAS AND ASSOCIATES, INC., and KANELAND SCHOOL DISTRICT No. 302, Defendants-Appellees (KMC Masonry, LLC, Defendant; The State of Illinois, Intervenor-Appellant).
Docket Nos. 2-10-0125, 2-10-0191 cons.
Appellate Court of Illinois, Second District
September 2, 2011
2011 IL App (2d) 100125
Appellate Court
Central Laborers’ Pension Fund v. Nicholas & Associates, Inc., 2011 IL App (2d) 100125
Decision Under Review: Appeal from the Circuit Court of De Kalb County, No. 09-CH-344; the Hon. Kurt P. Klein, and Appeal from the Circuit Court of Kane County, No. 09-CH-4038; the Hon. Alan W. Cargerman, Judges, presiding.
Judgment: Reversed and remanded.
Counsel on Appeal: Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro, Solicitor General, and Paul Berks, Assistant Attorney General, of counsel), for appellant State of Illinois.
Karen I. Engelhardt and Josiah A. Groff, both of Allison, Slutsky & Kennedy, P.C., of Chicago, for appellants James S. Jorgensen, Laborers’ Pension Fund, and Laborers’ Welfare Fund of Health & Welfare Department.
John A. Wolters, of Cavanagh & O‘Hara LLP, of Springfield, for other appellants.
Charles B. Lewis, Jeffrey L. Hamera, David I. Curkovic, аnd Richard P. Darke, all of Duane Morris LLP, of Chicago, for appellees.
Panel: JUSTICE BURKE delivered the judgment of the court, with opinion. Justices Schostok and Hudson concurred in the judgment and opinion.
¶ 1 These consolidated appeals present the issue of whether the Mechanics Lien Act (
¶ 2 FACTS
¶ 3 Defendant Nicholas & Associates (Nicholas) signed contracts with Kaneland School District No. 302 (Kaneland School District) and De Kalb Community School District No. 428 (De Kalb School District) to serve as the general contractor for the construction of two new elementary schools. In turn, Nicholas hired defendant KMC Masonry, LLC (KMC), as a subcontractor to perform masonry work on both projects. KMC secured labor for the project by entering into collective bargaining agreements (CBAs) with plaintiffs Laborеrs’ Local 32 and Laborers’ Welfare Fund of the Health and Welfare Department of the Construction and General Laborers’ District Council of Chicago and Vicinity. The CBAs required KMC to make monetary contributions to the other plaintiffs, and we assume for purposes of analysis that those plaintiffs qualify as multiemployer benefit plans under ERISA (the funds). See
¶ 4 On May 6, 2009, plaintiffs Laborers’ Pension Fund and Laborers’ Welfare Fund of the Health and Welfare Department of the Construction and General Laborers’ District Council of Chicago and Vicinity, and James S. Jorgensen, the administrator of those funds (Kane plaintiffs), sued KMC in the United States District Court for the Northern District of Illinois to recover the unpaid contributions. Specifically, the Kane plaintiffs brought an action under section 1145 of ERISA (
¶ 5 A. Appeal No. 2-10-0125 (De Kalb)
¶ 6 On August 21, 2009, plaintiffs Central Laborers’ Pension Fund, North Central Illinois Laborers’ Health and Welfare Fund, Northern Illinois Annuity Fund, Illinоis Laborers’ and
¶ 7 The complaint alleged that Nicholas contracted with the De Kalb School District to serve as the general contractor in building the Cortland Elementary School and that Nicholas hired KMC to perform masonry work on the Cortland project. The complaint alleged that KMC employees performed labor on the Cortland project from November 2008 through April 2009 and that the CBA required KMC to pay fringe benefits to the De Kalb plaintiffs for each hour worked. KMC allegedly breached the CBA by failing to pay the contributions. On July 19, 2009, the De Kalb plaintiffs gave Nicholas, KMC, and the De Kalb School District notice of a claim for a mechanic‘s lien for $130,613, representing the amount of the fringe benefit contributions that KMC had allegedly failed to make, as well as additional costs, damages, and attorney fees.
¶ 8 KMC did not respond to the complaint, but Nicholas filed a motion to dismiss under section 2-619 of the Code, arguing that the mechanic‘s lien claim was preempted by ERISA. On January 12, 2010, the circuit court of De Kalb County granted Nicholas‘s motion and dismissed the complaint on the ground of preemption. The court entered a written finding that, pursuant to Illinois Supreme Court Rule 304(a), there was no just cause to delay enforcement or appeal or both. See
¶ 9 B. Appeal No. 2-10-0191 (Kane)
¶ 10 On October 20, 2009, the Kane plaintiffs filed in the circuit court of Kane County a complaint for an accounting on their mechanic‘s lien against Nicholas, KMC, and Kaneland School District. The complaint alleged that, from February 2009 through May 2009, KMC‘s employees performed union work on the project under KMC‘s contract with Nicholas, but KMC failed to pay $131,504 into the funds as required by the CBA.
¶ 11 The complaint alleged that, on July 24, 2009, plaintiffs served Nicholas, KMC, and Kaneland School District with a notice of a lien claim on a public improvement (see
¶ 12 The complaint sought (1) an accounting of the amounts owed to thе funds, including interest and costs; (2) an order directing Nicholas to pay the amount due; and (3) the entry of a lien on all of Kaneland School District‘s money, bonds, and warrants that were due or would become due to Nicholas; and (4) an order directing Kaneland School District to pay
¶ 13 As in the De Kalb County matter, KMC did not respond, but on December 4, 2009, Nicholas and Kaneland School District moved to dismiss the complaint under section 2-619(a)(9) of the Code on the ground that ERISA preemption is affirmative matter that defeats the Kane plaintiffs’ claim under the Mechanics Lien Act. See
¶ 14 On February 9, 2010, the trial court dismissed the complaint with prejudice, based on ERISA preemption. The court directed Kaneland School District to release the money that had been held for plaintiffs’ lien claim, but the court stayed the release for 30 days. Because the dismissal applied to Nicholas and Kaneland School District and not to KMC, the court entered a written finding that there was no just reason for delaying either enforcement or appeal or both. See
¶ 15 ANALYSIS
¶ 16 Plaintiffs and the Attorney General argue that ERISA does not preempt the Mechanics Lien Act. The standard governing these consolidated appeals is familiar. A dismissal pursuant to section 2-619 is reviewed de novo. Doe A. v. Diocese of Dallas, 234 Ill. 2d 393, 396 (2009). A motion to dismiss under section 2-619(a)(9) asserts that a plaintiff‘s claims against the defendant are “barred by other affirmative matter avoiding the legal effect of or defeating the claim[s].”
¶ 17 The purpose of the Mechanics Lien Act is to protect general contractors and subcontractors who are providing labor and materials for the benefit of an owner‘s property, by permitting them a lien on the property. Crawford Supply Co. v. Schwartz, 396 Ill. App. 3d 111, 119 (2009). Because the rights under the Mechanics Lien Act are in derogation of common law, the steps necessary to invoke those rights must be strictly construed. Crawford Supply Co., 396 Ill. App. 3d at 119. However, once the contractor or subcontractor has strictly complied with the requirements and the lien has properly attached, then the Mechanics Lien Act should be liberally construed to accomplish its remedial purpose. Crawford Supply Co., 396 Ill. App. 3d at 119.
“Any person who shall furnish labor, services, material, fixtures, apparatus or machinery, forms or form work to any contractor having a contract for public improvement for any county, township, school district, city, municipality, municipal corporation, or any other unit of local government in this State, shall have a lien for the value thereof on the money, bonds, or warrants due or to become due the contractor having a contract with such county, township, school district, municipality, municipal corporation, or any other unit of local government in this State under such contract. The lien shall attach only to that portion of the money, bonds, or warrants against which no voucher or other evidence of indebtedness has been issued and delivered to the contractor by or on behalf of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government as the case may be at the time of the notice.”
770 ILCS 60/23(b) (West 2010) .
A “contractor” under section 23 is defined to include “any subcontractor.”
¶ 19 In dismissing the complaints, the circuit courts concluded that ERISA preempts the Mechanics Lien Act and that preemption is affirmative matter defeating plaintiffs’ claims. Pursuant to the supremacy clause of the United States Constitution, federal law can preempt state laws that interfere with or are contrary to federal law.
¶ 20 On appeal, plaintiffs argue that the circuit courts’ dismissals of their mechanic‘s lien claims must be reversed because the Mechanics Lien Act is not preempted by ERISA. A ruling on ERISA preemption is a question of law that we review de novo. Trustees of the AFTRA Health Fund v. Biondi, 303 F.3d 765, 772 (7th Cir. 2002) (citing Moran v. Rush Prudential HMO, Inc., 230 F.3d 959, 966 (7th Cir. 2000), aff‘d, 536 U.S. 355 (2002)). With certain exceptions not relevant here, section 1144 of ERISA, the preemption clause, provides that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” (Emphasis added.)
¶ 22 Biondi set forth a comprehensive summary of the Supreme Court‘s recent jurisprudence in the area of ERISA preemption. The critical statutory phrase, “relate to any employee benefit plan,” is not self-defining, and the Supreme Court “[has] been at least mildly schizophrenic in mapping its contours.” (Internal quotatiоn marks omitted.) Biondi, 303 F.3d at 773 (quoting Carpenters Local Union No. 26 v. United States Fidelity & Guaranty Co., 215 F.3d 136, 139 (1st Cir. 2000)).
¶ 23 The Supreme Court‘s early ERISA preemption cases glossed over the phrase “relate to” in section 1144(a) (
“‘Our past cases have recognized that the Supremacy Clause, U.S. Const., Art. VI, may entail pre-emption of state law either by express provision, by implication, or by a conflict between federal and state law. And yet, despite the variety of these opportunities for federal pre-emption, we have never assumed lightly that Congress has derogated state regulation, but instead have addressed claims of pre-emption with the starting presumption that Congress does not intend to supplant state law. Indeed, in cases like this one, where federal law is said to bar state action in fields of traditional state regulation, we have worked on the “assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.“‘” Biondi, 303 F.3d at 773 (quoting Travelers, 514 U.S. at 654-55).
¶ 24 Additionally, the Travelers Court noted that, because preemption claims turn on congressional intent, it is necessary, as with any exercise of statutory construction, to begin the analysis ” ‘with the text of the provision in question, and move on, as need be, to the structure and purpose of the Act. ‘” Biondi, 303 F.3d at 774 (quoting Travelers, 514 U.S. at 655). In addressing the “clearly expansive” text of section 1144(a) of ERISA, the Court concluded that, if the statute‘s “words of limitation“–i.e., “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, for ‘really, universally, relations stop nowhere.’ ” Biondi, 303 F.3d at 774 (quoting Travelers, 514 U.S. at 655).
¶ 25 Travelers also noted that the Court‘s prior decision in Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983), did not provide much guidance. In Shaw, the Court held that “[a] law ‘relates to’ an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan.” Shaw, 463 U.S. at 96-97. However, “an uncritical literalism [of the phrase ‘connection with‘] is no more help than in trying to construe ‘relate to.’ For the same reasons that infinite relations cannot be the measure of pre-emption, neither can infinite сonnections.” Travelers, 514 U.S. at 656.
¶ 26 For this reason, the Travelers Court decided to add another layer to its ERISA preemption analysis, holding that, for purposes of section 1144(a) of ERISA, the evaluation
¶ 27 B. ERISA‘s Statutory Objectives
¶ 28 Cataloging ERISA‘s statutory objectives is a fairly straightforward exercise. ERISA‘s primary objectives are to “protect *** the interests of participants *** and their beneficiaries, by requiring the disclosure and reporting *** of financial and other information *** 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 the Federal courts” (
¶ 29 Additionally, we know that, when Congress enacted the preemption provision of section 1144(a), it intended “to ensure that plans and plan sponsors would be subject to a uniform body of benefits law; the goal was to minimize the administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government . . ., [and to prevent] the potential for confliсt in substantive law . . . requiring the tailoring of plans and employer conduct to the peculiarities of the law of each jurisdiction.” (Internal quotation marks omitted.) Biondi, 303 F.3d at 774 (quoting Travelers, 514 U.S. at 656-57). Application of the Mechanics Lien Act does not conflict with ERISA plans or otherwise disturb the uniform body of benefits law; thus, this objective weighs against preemption as well.
¶ 30 Under this rubric, the Supreme Court has identified at least three instances where a state law can be said to have a “connection with” or “reference to” employee benefit plans: (1) when the state law “mandate[s] employee benefit structures or their administration” (Travelers, 514 U.S. at 658); (2) when the state law binds employers or plan administrators to particular choices or precludes uniform administrative practice, thereby functioning as a
¶ 31 Because plaintiffs’ state-law claims are for statutory mechanic‘s liens, a traditional area of state regulation, defendants bear ” ‘the considerable burden of overcoming “the starting presumption that Congress does not intend to supplant state law.” ’ ” Biondi, 303 F.3d at 775 (quoting De Buono, 520 U.S. at 814). Defendants argue that the circuit courts correctly concluded that they have rebutted the presumption against preemption, on the ground that the Mechanics Lien Act provides an alternative enforcement mechanism to ERISA‘s civil enforcement provisions аnd is therefore expressly preempted. The Supreme Court has identified two categories of state laws that act as alternative enforcement mechanisms to ERISA. One is where “the existence of a pension plan is a critical element of a state-law cause of action,” and the other is where a “state statute contains provisions that expressly refer to ERISA or ERISA plans.” De Buono, 520 U.S. at 815. The former is preempted under ERISA‘s express preemption provision in section 1144(a) (
¶ 32 The issue of whether a state mechanic‘s lien claim qualifies as an alternative enforcement mechanism triggering ERISA preemption has resulted in a post-Travelers majority view and minority view, which are set forth in Forsberg v. Bovis Lend Lease, Inc., 2008 UT App 146, 184 P.3d 610 (finding no preemption), and International Brotherhood of Electrical Workers, Local Union No. 46 v. Trig Electric Construction Co., 13 P.3d 622 (Wash. 2000) (finding preemption), respectively.
¶ 33 C. Forsberg
¶ 34 In Forsberg, a hospital hired a general contractor to expand the hospital‘s building, and the general contractor hired a subcontractor for the project‘s electrical work. Forsberg, 2008 UT App 146, ¶ 2. The subcontractor executed a CBA, which required it to make trust fund contributions and pay wage assessments for its employees, but the subcontractor was historically late on making its contributions. Forsberg, 2008 UT App 146, ¶ 3. Several funds filed an ERISA claim in federal court seeking payment of the delinquent contributions. After the funds obtained a judgment against the subcontractor, the federal court issued a “Garnishee Order,” requiring the general contractor to retain certain earnings due to the subcontractor for its work on the project. The amount was credited against the most delinquent contributions. Forsberg, 2008 UT App 146, ¶ 3. The subcontractor filed for bankruptcy protection, and the funds filed a state mechanic‘s lien against the hospital property. The general contractor and its surety executed a bond to release the lien, but the trial court ruled, inter alia, that the mechanic‘s lien claim was preempted by ERISA. Forsberg, 2008 UT App 146, ¶ 5.
¶ 36 After thoroughly chronicling ERISA preemption jurisprudence, the Court of Appeals of Utah noted that Travelers had “sent a strong message to the lower courts that section [1144](a) was subject to significant limitations and that any challenge to a state law of general application affecting an area of traditional state concern must overcome a strong presumption that Congress did not intend to preempt it” and that “most courts after 1995 have held that ERISA does not preempt mechanic‘s lien laws or contractors’ bond statutes of general application. [Citations.]” Forsberg, 2008 UT App 146, ¶ 32. In agreement with a long line of cases, the court held that Utah‘s mechanic‘s lien and private bond statutes, which make no reference to trust funds or ERISA itself, are not preempted by section 1144(a). Forsberg, 2008 UT App 146, ¶ 32.
¶ 37 Like Utah‘s mechanic‘s lien statute, the Mechanics Lien Aсt (1) has general applicability, (2) predates ERISA, (3) makes no reference to trust funds or ERISA itself, (4) functions irrespective of ERISA, and (5) regulates an area of traditional state concern. See Forsberg, 2008 UT App 146, ¶ 34. Furthermore, the Mechanics Lien Act fits none of the categories of state law that “relate to” ERISA for purposes of preemption: (1) laws that regulate the type of benefits or terms of ERISA plans; (2) laws that create reporting, disclosure, funding, or vesting requirements for ERISA plans; (3) laws that provide rules for the calculation of the amount of benefits to be paid under ERISA plans; and (4) laws and common-law rules that provide remedies for misconduct growing out of administration of ERISA plans. See Forsberg, 2008 UT App 146, ¶ 35 (quoting Airparts Co. v. Custom Benefit Services of Austin, Inc., 28 F.3d 1062, 1064-65 (10th Cir. 1994)).
¶ 38 The mechanic‘s lien claims in these appeals do not affect ” ‘relations among the principal ERISA entities–the employer, the plan, the plan fiduciaries, and the beneficiaries, ‘” and if there is no such effect, there is no preemption. Forsberg, 2008 UT App 146, ¶ 36 (quoting Airparts, 28 F.3d at 1065). No defendant in these cases is an ERISA entity: the employer, the plan, the plan fiduciaries, or the beneficiaries. See Forsberg, 2008 UT App 146, ¶ 37. Although the collection of contributions through a lien claim may indirectly affect relations among the principal ERISA entities, “such a broad application of the term ‘affect’ would create the same ‘uncritical literalism’ disapproved [of] in Travelers.” Forsberg, 2008 UT App 146, ¶ 37 (quoting Travelers, 514 U.S. at 656).
¶ 39 Forsberg rejected the position advocated by defendants in these cаses: that a mechanic‘s lien claim is preempted because the funds essentially are employees resorting to state law to avail themselves of an alternative cause of action to collect benefits. Forsberg, 2008 UT App 146, ¶ 38. The Forsberg court concluded that, because any ERISA preemption analysis must consider whether the action is between or among ERISA entities or between one or more ERISA entities and an outside party, the defendants’ status as “outside parties”
¶ 40 We are further persuaded by the Forsberg court‘s conclusion that permitting a mechanic‘s lien claim would not be contrary to ERISA‘s goal to ensure that ” ‘plans and plan sponsors would be subject to a uniform body of benefits law *** [and] to minimize the administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government. ‘” Forsberg, 2008 UT App 146, ¶ 39 (quoting Ingersoll-Rand v. McClendon, 498 U.S. 133, 142 (1990)). Like the Utah mechanic‘s lien statute, the Mechanics Lien Act is not a “benefits law” but, rather, is a law of general applicability, operating irrespective of ERISA. Furthermore, neutral application of the Mechanics Lien Act will not subject any ERISA entity to conflicting laws concerning the terms, duties, or administration of ERISA plans. See Forsberg, 2008 UT App 146, ¶ 39 (citing
¶ 41 Our holding conforms to the post-Travelers majority view that ERISA does not preempt mechanic‘s lien laws or contractor‘s bond statutes that have general application and do not mention ERISA. See Forsberg, 2008 UT App 146, ¶ 32 (citing Southern California IBEW-NECA Trust Funds v. Standard Industrial Electric Co., 247 F.3d 920, 928-29 (9th Cir. 2001) (disavowing pre-Travelers cases and holding that payment-bond and stop-notice statutes of general application are not preempted by ERISA); Greenblatt v. Delta Plumbing & Heating Corp., 68 F.3d 561, 575 (2d Cir. 1995) (citing Travelers and Ingersoll-Rand and concluding that the “surety law does not touch upon any rights or duties incident to the ERISA plan itself, nor does it conflict with any ERISA cause of action“); Bellemead Development Co. v. New Jersey State Council of Carpenters Benefit Funds, 11 F. Supp. 2d 500, 507-08, 516-17 (D.N.J. 1998) (citing Travelers and following Ragan v. Tri-County Excavating, Inc., 62 F.3d 501 (3d Cir. 1995), to hold that ERISA does not preempt construction lien law of general application); Betancourt v. Storke Housing Investors, 82 P.3d 286, 288-96 (Cal. 2003) (citing Travelers and holding that mechanic‘s lien law of general application is not preempted by ERISA); Hawai‘i Laborers’ Trust Funds v. Maui Prince Hotel, 918 P.2d 1143, 1155-56 (Haw. 1996) (holding that mechanic‘s lien law of general application is not preemptеd by ERISA)).
¶ 43 Trig is in the minority of post-Travelers opinions, which hold that ERISA preempts a mechanic‘s lien statute of general application. Forsberg, 2008 UT App 146, ¶ 32 n.19 (citing Trig, 13 P.3d at 627-28). In Trig, a general contractor contracted to work on a project at a local community college and hired a subcontractor to perform the electrical work. The general contractor obtained a surety bond to protect all workers, mechanics, subcontractors, and materialmen supplying material and performing labor on the project; and the college withheld a portion of the contract price as a retainage trust fund. A CBA between the union and the subcontractor required the subcontractor to contribute a portiоn of its workers’ wages to benefit-trust-fund plans falling under the ambit of ERISA. The subcontractor became delinquent on these contributions, and a union sued to foreclose on the general contractor‘s bond. Following the entry of summary judgment for the defendants, the matter reached the Supreme Court of Washington, where the dispositive issue was whether ERISA preempted the lien foreclosure action. Trig, 13 P.3d at 623.
¶ 44 The lien action in Trig was brought under Washington‘s public works lien statutes (Wash. Rev. Code Ann. §§ 39.08.10, 60.28.10), which provide a mechanism for a defaulting subcontractor‘s obligations to be collected from the general contractor. Trig, 13 P.3d at 624. In a narrow 5 to 4 decision, the Washington Supreme Court decided that, despite the new line of cases following Travelers, it would not depart from an earlier holding that ERISA preempts the Washington public works lien statutes. Trig, 13 P.3d at 624 (citing Puget Sound Electrical Workers Health & Welfare Trust Fund v. Merit Co., 870 P.2d 960 (Wash. 1994)). The majority held that, “[a]s we understood in Merit, to the extent the public works lien statutes provide an enforcement mechanism by imposing liabilities on general contractors’ bonds and retainage funds for the delinquent benefit plan payments of a subcontractor, they provide alternative enforcement mechanisms to those provided by Congress when it enacted ERISA. The state statutes, then, undeniably ‘relate to’ and ‘connect with’ ERISA for the purposes of ERISA‘s preemption provision.” Trig, 13 P.3d at 625 (citing
¶ 45 The dissent strongly disagreed, stating, “[i]n this case, the lien laws are of general applicability. They have only tenuous connections with ERISA plans. Under Travelers, such a connection is not enough to overcome the presumption that Congress does not intend to supplant state law.” Trig, 13 P.3d at 631 (Johnson, J., dissenting, joined by Smith, Talmadge, and Ireland, JJ.). The dissent pointed out that the majority erroneously had employed an “abandoned” preemption analysis without considering the ” ‘objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive. ’ ” Trig, 13 P.3d at 628 (Johnson, J., dissenting, joined by Smith, Talmadge, and Ireland, JJ.) (quoting Travelers, 514 U.S. at 656). Upon consideration of ERISA‘s objectives and the traditional presumption that Congress does not intend to supplant state law (Trig, 13 P.3d at 628-29 (Johnson, J., dissenting, joined by Smith, Talmadge, and Ireland, JJ.)), the dissent concluded that the court‘s prior decision did not compel a finding оf preemption, because “[t]he public works lien laws at issue in [Merit] and in this case are laws of general applicability that are used by a class of creditors regardless of whether there is an ERISA plan. Thus, Travelers’ reaffirmation of Ingersoll-Rand‘s holding [that preemption occurs when the state law was
¶ 46 E. McHugh
¶ 47 Defendants renew their argument that plaintiffs’ mechanic‘s lien claims are barred by McHugh, where a union sued a general contractor under the Prevailing Wage Act (
¶ 48 The trial court and the Appellate Court, First District, concluded that the complaint must be dismissed on the ground that the claim “related to” an employee benefit plan and, thus, was preempted by section 1144(a) of ERISA. McHugh, 230 Ill. App. 3d at 946. The appellate court relied heavily on language in pre-Travelers cases that said that ERISA‘s ” ‘deliberately expansive’ language was ‘designed to “establish pension plan regulation as exclusively a federal concern” ’ ” (McHugh, 230 Ill. App. 3d at 943 (quoting Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 46 (1987), quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523 (1981))); and said “Congress used the words ‘relate to’ in their broad[est] sense, rejecting more limited preemption language that would have made the clause ‘applicable only to state laws relating to the specific subjects covered by ERISA’ ” (McHugh, 230 Ill. App. 3d at 943 (quoting Shaw, 463 U.S. at 98)). In finding preemption, the court held that “ERISA preemption is triggered by not just any indirect effect on administrative procedures, but rather by an effect on the primary administrative functions of benefit plans, such as determining an employee‘s eligibility for a benefit and the amount of that benefit.” McHugh, 230 Ill. App. 3d at 946.
¶ 49 McHugh predates Travelers and is not a useful guide. We decline to follow McHugh and Trig because neither employs the narrower test for ERISA preemption that the Supreme Court announced in Travelers and its progeny. We emphasize that we reach no conclusion as to whether ERISA preempts the Prevailing Wage Act, as our analysis does not require us
¶ 50 Finally, we note that certain plaintiffs argue that they are funds that are not governed by ERISA and its preemption provision and, therefore, even if ERISA preempts the Mechanics Lien Act, the circuit courts erred in dismissing their claims on preemption grounds. We need not reach the issue, because we hold that ERISA does not preempt the Mechanics Lien Act. Moreover, Nicholas argues that allowing plaintiffs to enforce their mechanic‘s lien claims would lead to an inequitable result because Nicholas already has paid KMC the contributions that KMC was to pass along to the funds. However, Nicholas cites no provision in the Mechanics Lien Act that might afford such a defense or any authority for the proposition that equity is a factor to be considered in our ERISA preemption analysis.
¶ 51 CONCLUSION
¶ 52 In light of the uncertainty of McHugh‘s validity after Travelers, we understand the circuit courts’ reliance on the doctrine of stare decisis as support for continuing to follow McHugh in these cases. See O‘Casek v. Children‘s Home & Aid Society of Illinois, 229 Ill. 2d 421, 440 (2008) (stare decisis requires courts to follow the decisions of higher courts). However, for the preceding reasons, we hold that ERISA does not preempt the Mechanics Lien Act, and the dismissals of plaintiffs’ claims in the circuit courts of Kane County and De Kalb County are reversed and the causes are remanded for further proceedings consistent with this opinion.
¶ 53 Reversed and remanded.
JUSTICE BURKE
JUSTICE