Summary
The Supreme Court held that ERISA preempts a Georgia statute specifically exempting ERISA employee welfare benefit plans from garnishment. However, the Court concluded that ERISA does not generally preclude state-law garnishment of welfare plan benefits to satisfy judgments against plan participants. The judgment of the Georgia Supreme Court was affirmed.
Topics
Practice areas
Questions Presented
- Whether Ga. Code Ann. § 18-4-22.1, which expressly exempts ERISA employee benefit plans from garnishment, is preempted by ERISA § 514(a).
- Whether ERISA preempts the general Georgia garnishment law as applied to ERISA welfare benefit plans.
Holdings
- Ga. Code Ann. § 18-4-22.1, which singles out ERISA employee welfare benefit plans for different treatment under state garnishment procedures, is preempted under ERISA § 514(a) because it expressly refers to and applies only to ERISA plans.
- ERISA does not preclude state-law garnishment of ERISA welfare benefit plans, even when the purpose is to collect judgments against plan participants.
Key quotations
“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.” (at 829)
“The pre-emption provision [of § 514(a)] . . . displace[s] all state laws that fall within its sphere, even including state laws that are consistent with ERISA's substantive requirements.” (at 830)
“Congress's decision to remain silent concerning the attachment or garnishment of ERISA welfare plan benefits 'acknowledged and accepted the practice, rather than prohibiting it.'” (at 838)
Factual background
Petitioners are trustees of an employee welfare benefit plan providing vacation and holiday benefits, governed by ERISA. Respondent, a collection agency, obtained money judgments against 23 plan participants and sought to garnish their plan benefits through a Georgia trial court. The trial court granted the garnishment, but the Georgia Court of Appeals reversed, citing a state statute exempting ERISA plans from garnishment. The Georgia Supreme Court reversed, holding that the state statute was preempted by ERISA and that the plan was subject to garnishment under general state law.
Procedural history
Respondent obtained money judgments against plan participants and sought to garnish their benefits. The Georgia trial court granted garnishment. The Georgia Court of Appeals reversed, holding that Ga. Code Ann. § 18-4-22.1 exempted ERISA plan benefits from garnishment. The Georgia Supreme Court reversed, holding the state statute preempted by ERISA and allowing garnishment. The U.S. Supreme Court granted certiorari.