Brinker v. Michigan Bell Telephone Co.

Per Curiam.

Defendant appeals by leave granted from the order of the Macomb Circuit Court denying defendant’s motion for summary disposition.

Romandus Brinker, Jr., had been employed by defendant for many years when, in 1982, he was presented with a "one-time offer” to participate in defendant’s Supplemental Income Protection Plan. Defendant often used the sipp to encourage voluntary termination of its employees, particularly those eligible for early retirement. Under the plan, plaintiff was permitted to retire before his scheduled retirement date and receive a pension consonant with his years of service plus monthly sipp payments for the following four years. Defendant accepted the plan and retired in April, 1982.

Plaintiff claims that, following his early retirement, defendant offered the same sipp to other employees, contrary to its representation that the sipp was a "one-time offer.” In September, 1984, plaintiffs filed a complaint against defendant claiming that defendant falsely characterized the sipp as a one-time offer and that, as a result of defendant’s misrepresentation, he lost pension benefits by electing early retirement. Plaintiff sought damages for breach of contract, misrepresentation, fraud, deception, improper inducement and interference with an advantageous economic relationship. Nancy Brinker sought derivative damages for loss of consortium.

Defendant removed the action to federal court and subsequently filed a motion for summary judgment, alleging that all of plaintiffs’ claims were preempted by the Federal Employment Retirement Income Security Act of 1974, 29 USC 1001 et seq. Rather than ruling on the merits of defendant’s motion, the federal district court judge held that there was not sufficient basis to support federal removal jurisdiction and remanded the case to the Macomb Circuit Court.

Upon remand to the trial court, defendant again filed its motion for summary disposition pursuant to MCR 2.116(I) on the basis that plaintiffs’ claims were preempted by erisa. The trial court did not rule on the merits of the preemption issue but denied defendant’s motion.

It is not disputed that the sipp, which is at issue in this action, is considered an employee benefit plan within the meaning of erisa. The question which we must decide is whether plaintiffs’ state common-law causes of action are preempted by erisa.

Erisa was enacted to promote and protect the interests of employees and their beneficiaries in employee benefit plans. Shaw v Delta Air Lines, Inc, 463 US 85, 90; 103 S Ct 2890; 77 L Ed 2d 490 (1983). It applies to all employee benefit plans established by an employer engaged in an industry or activity which affects commerce. 29 USC 1003(a). Save for a few limited exceptions, erisa preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan” covered by erisa. 29 USC 1144(a); § 514(a) of erisa.

In Shaw v Delta Air Lines, supra, the United States Supreme Court considered the scope of the erisa’s preemptive provisions in the context of New York’s Human Rights Law and Disability Benefits Law and concluded that Congress intended a broad application:

We have no difficulty in concluding that the Human Rights Law and Disability Benefits Law "relate to” employee benefit plans. The breadth of § 514(a)’s pre-emptive reach is apparent from that section’s language. 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.

Nor, given the legislative history, can § 514(a) be interpreted to pre-empt only state laws dealing with the subject matters covered by erisa — reporting, disclosure, fiduciary responsibility, and the like. The bill that became erisa originally contained a limited pre-emption clause, applicable only to state laws relating to the specific subjects covered by erisa. The Conference Committee rejected these provisions in favor of the present language, and indicated that the sections’ pre-emptive scope was as broad as its language. [Id., pp 96-98.]

Employing this standard in the present case, we conclude that plaintiffs’ state common-law claims are preempted by erisa. Plaintiffs’ complaint states causes of action for breach of contract, misrepresentation, fraud, deception and improper inducement. Although plaintiffs’ claims are technically based upon Michigan common law, even a state’s general common law is considered preempted by erisa if "state common law is being relied upon to resolve a dispute over the litigants’ rights and obligations that have their genesis in an employee benefit plan.” Hollenback v Falstaff Brewing Corp, 605 F Supp 421, 429 (ED Mo, 1984), aff'd 780 F2d 20 (CA 8, 1985). See also Authier v Ginsberg, 757 F2d 796 (CA 6, 1985); Ogden v Michigan Bell Telephone Co, 571 F Supp 520 (ED Mich, 1983).

Here, all of the common-law causes of action pled by plaintiffs are intimately connected to defendant’s administration of the sipp and plaintiffs’ receipt of pension benefits. Compare Visioneering, Inc, Profit Sharing Trust v Belle River Joint Venture, 149 Mich App 327; 386 NW2d 185 (1986). No other conclusion can be reached but that the common law which plaintiffs rely on "relates to” the employee benefit plan which is covered by erisa. To hold otherwise would conflict with Congress’s intent to avoid conflicting state regulations and interpretations and to make the regulation of pension plans exclusively a federal matter. Shaw, supra. Moreover, if the alleged violations did occur, plaintiffs may pursue the remedies expressly provided by erisa.¹ See 29 USC 1024(b), 1104, and 1109(a). Ogden, supra. It is in erisa that plaintiffs’ remedies lie.

Since plaintiffs’ state common-law claims are pre-empted by erisa, plaintiffs’ complaint fails to state a cause of action as a matter of law. MCR 2.116(C)(8). The lower court erred in denying defendant’s motion for summary disposition.

Reversed.

1 We are most concerned that plaintiff may be left without any remedy should plaintiffs claim be barred by the statute of limitations. However, we have been hampered in considering this question by plaintiffs failure to submit a brief on appeal.