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Wal-Mart health care law is preempted - Part 2
July 19, 2006 by Ross Runkel at LawMemo
Why do I say the judge was wrong in holding that Maryland's Wal-Mart health care law is preempted by ERISA?
I said that here: Wal-Mart health care law is preempted.
The court opinion: Retail Industry Leaders Association v. Fielder (US District Court, District of Maryland 07/19/2006).
The judge's primary error is that he begins his analysis by declaring that the Maryland statute mandates that Wal-Mart pump more money into an ERISA plan.
Instead, one should ask the question: Does the Maryland statute mandate that Wal-Mart pump more money into an ERISA plan?
The answer: No. The Maryland statute does not mandate that Wal-Mart pump more money into an ERISA plan.
The Maryland statute mandates that Wal-Mart take 8% of its wages, and do one of the following three things. The choice is up to Wal-Mart:
- Spend it on an ERISA plan.
- Spend it on providing health care directly.
The judge quoted a federal regulation dealing with on-premises "facilities for the treatment of minor injuries or illnesses or rendering first aid in case of accidents occurring during working hours."
The judge then writes off this option as springing from the "active imagination of ... lawyers," and "utterly out of line with reality."
He seems to have a vision of neatly dressed nurses handing out aspirin tablets. That's obviously not what the regulation had in mind.
Bottom line: The judge wrote this option out of the state statute because he didn't think the legislature meant it. (A very interesting legal theory, indeed.)
- Write a check to the state government.
The judge dismisses this: While this is "theoretically true, it does not even approximate reality."
Why? Because "no rational employer would pay the state." Smart employers, given the choice, would beef up their ERISA plans rather than write a check to the state.
Bottom line: The judge wrote this option out of the state statute because Wal-Mart probably won't use it.
In the end, the judge took a statute with three options and rewrote it to contain only one option.
Now that the re-written statute requires Wal-Mart to spend money on its ERISA plan, the statute is preempted by ERISA. Nice going, Your Honor.
I have some other statutes I don't like. Could you come over and rewrite these for me?
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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
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