4th Circuit: Maryland Wal-Mart Law Preempted by ERISA

Update:  Now that I have had a chance to glance over the Fourth Circuit's Opinion in Fielder, and not wanting to reinvent the wheel, I am linking to an overview of the case from Michael Fox at Jottings By An Employer's Lawyers and an argument about why the decision is wrong by Ross Runkel at Ross' Employment Law Blog.

Fresh off the presses today comes news that the Fourth Circuit Court of Appeals has affirmed the judgment of the District of Maryland that the Maryland Fair Share Healthcare Law (aka, the Wal-Mart Bill) is preempted by ERISA.  The decision in RILA v. Fielder, No. 06-1840 (4th Cir. Jan. 17, 2007) is here.

Here's some of what the New York Times article has to say about the 4th Circuit's opinion:

A federal  appeals court  ruled today that  Maryland violated federal law when it required Wal-Mart Stores to increase spending on employee health insurance, in a decision that appears likely to end a bitter yearlong legal battle that pitted state legislators, organized labor and health care advocates against the nation’s largest retailer.

The 2-to-1 ruling by a panel of the United States Court of Appeals for the Fourth Circuit is a major setback — if not a fatal blow — for a nascent campaign, called “fair share,” that sought to move millions of America’s working poor off of state-sponsored insurance programs, like Medicaid, and on to employer-based plans.

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But the appeals court, upholding a lower court ruling, found that the Maryland rule violated a federal labor law intended to allow companies to create a uniform system of health benefits across the country, rather than navigate a patchwork of state-by-state requirements.

By requiring employers in Maryland to restructure insurance plans, the court found, the law “conflicts” with the intent of the federal labor law, known as the Employee Retirement Income Security Act, or ERISA.

Of course, this was how my ERISA preemption analysis came out way back when, but I still believe ERISA should be amended to allow for state experimentation in this area of health care financing.

One other point: I have not had the chance to read the 4th Circuit's opinion (and will update this post when I do), but the 2-1 split suggests that there is an outside chance for rehearing en banc or perhaps even Supreme Court review.  The latter is less likely since there is not a circuit split on the issue and lower courts in general have not had the opportunity to weigh in on fair share legislation.

PS