Saturday, November 7, 2009

Massachusetts Supreme Judicial Courts Finds Equitable Restitution Claim Preempted By ERISA

In Hitachi High Technologies America, Inc. vs. Bowler (SJC-10386), the Massachusetts Supreme Judicial Court held that an ERISA plan fiduciaries state law action to recover money mistakenly paid to a plan fiduciary was preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq. (2006).  Ultimately, the court held that the plan either had a remedy in federal court or had no remedy at all.  Regardless, there was no viable cause of action in state court.

The court stated:
It appears likely that Hitachi has a remedy under 29 U.S.C. § 1132(a)(3)--a question for a Federal court to decide. See 29 U.S.C. § 1132(e). Even if Hitachi cannot bring an action for equitable restitution under 29 U.S.C. § 1132(a)(3)(B), Hitachi's action nevertheless falls within the "scope" of ERISA's civil enforcement provision and is therefore preempted. Danca v. Private Health Care Sys., Inc., 185 F.3d 1, 5 n. 4 (1st Cir.1999) ("The fact that ERISA does not provide the remedy plaintiffs seek is not relevant; all that matters is that the claim be within the scope" of ERISA's enforcement provision [emphases in original] ). See Aetna Health Inc. v. Davila, 542 U.S. 200, 209 (2004) ("any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted").

3. Conclusion. We conclude that allowing Hitachi to go forward with its unjust enrichment action would present the threat of inconsistent regulation relating to the administration of ERISA plans and would constitute an "alternative enforcement mechanism." Therefore, Hitachi's action for unjust enrichment "relates to" an ERISA plan, 29 U.S.C. § 1144(a), and the judge did not err in dismissing this action based on ERISA preemption.


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