Anthony Kennedy and Post-Scalia SCOTUS Lay Down ERISA Law

The court’s ruling in Gobeille v. Liberty Mutual Insurance Co. sets precedent in how ERISA affects state-level benefits plans.

After the recent death of conservative stalwart Antonin Scalia, the U.S. Supreme Court has an even ideological split: four judges whose voting record has tracked liberal and four conservatives. With the Republican-dominated Senate loath to approve a nominee from President Barack Obama — especially in an election year — a full roster of nine justices may have to wait.

In the meantime, frequent swing voter — though he rejects the label — Anthony Kennedy could tip the balance in rulings. “The possibility of a 5–3 liberal vote makes this court a sort of jump ball,” says Brian Netter, co-leader of the Supreme Court and appellate group at law firm Mayer Brown in Washington.

And already, he’s delivered the written opinion in a case that set precedent in application of the Employee Retirement Income Security Act of 1974 (ERISA) On Tuesday, the court voted 6–2 in Gobeille v. Liberty Mutual Insurance Co., in which the court held that ERISA takes precedence over state health care databases — the one in question in this case being Vermont’s — on health care costs and distribution. More broadly though, while this case specifically dealt with a very narrow state law, the Gobeille ruling could apply to management of other state-level benefit plans such as defined-benefit and defined-contribution pension plans.

“Specifically, if these laws are challenged, depending on exactly how they are written, they may be found to be preempted by ERISA, too,” says Allison Klausner, principal, Knowledge Resource Center and director of government relations at Buck Consultants in New York, a human resource consulting firm part of Xerox Corp.

The ideology portion of Kennedy’s Segal-Cover score, a rough measurement using newspaper editorials on SCOTUS nominees, clocks in at 0.365, with 0 being the most conservative and 1 the most liberal. Liberal legend Ruth Bader Ginsburg’s score is 0.68. George W. Bush appointee and Chief Justice John Roberts measured 0.12 in the lead-up to his confirmation. And the late Scalia? 0.0. “If Scalia had been around, he would have likely voted for ERISA preemption.”

Appointed by former president Ronald Reagan, Kennedy, 79, has supported abortion rights and same-sex marriage; his June 2015 opinion on the landmark Obergefell v. Hodges case has become a popular reading choice at wedding ceremonies. He has also favored the Clean Air Act, though in 2009 he wrote the majority opinion ruling in favor of a mining company that wanted to extract gold using a pollution-heavy method.

When it comes to corporations and union law, though, Kennedy’s voting record on such issues has tended to track conservative. He wrote the majority opinion in Citizens United v. Federal Election Commission, the landmark 2010 decision that paved the way for super PACs, political action committees that can raise unlimited sums. In the 2003 case Nevada Dept of Human Resources v. Hibbs, Kennedy, along with Scalia and Clarence Thomas, dissented in a decision that applied the federal Family and Medical Leave Act over state rules. That same term Kennedy wrote a partial dissent in Norfolk & Western Railway Co. v. Ayers, in which he argued that railroad workers who had contracted asbestos poisoning on the job should not be entitled to monetary compensation for pain and suffering.

Kennedy’s line of questioning during Gobeille, as well as in Friedrichs v. California Teachers Association, paralleled that of the more conservative faction of the court, according to SCOTUSblog, though it was perhaps less strident. Friedrichs concerns the validity under the First Amendment of requiring that non–union member teachers pay union dues for collective bargaining benefits. The ruling could determine public unions’ collective bargaining powers, which may mean a less cohesive voice when it comes to pension negotiations. Should the court vote 4-4 on that case — or any case, for that matter — the lower court’s ruling, which favored the California teachers’ union, would hold. But the Supreme Court could ask that pending cases be reheard before a full nine justices.

In the meantime, the U.S. Supreme Court has decided to stay out of a state pension-level matter. On Monday, the court declined to hear an appeal from three unions representing New Jersey state troopers over federal contract protections on state pension payments. This leaves in tact a ruling from the New Jersey state supreme court handed down this past June ruling that Governor Chris Christie did not have to make scheduled payments into the state pension system, which has more than $80 billion in unfunded liabilities.

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Follow Anne Szustek on Twitter at @the59thStBridge.