Lexplug logoLexplug

Egelhoff v. Egelhoff

United States Supreme Court
532 U.S. 141 (2001)
ELI5:

Rule of Law:

The Employee Retirement Income Security Act of 1974 (ERISA) preempts state laws that automatically revoke a former spouse's beneficiary designation for an ERISA-governed nonprobate asset upon divorce, as such laws interfere with the national uniformity of plan administration and conflict with ERISA's requirement that plan administrators follow the documents and instruments governing the plan.


Facts:

  • David A. Egelhoff was employed by the Boeing Company, which provided him with a life insurance policy and a pension plan, both governed by ERISA.
  • Mr. Egelhoff designated his wife, Donna Rae Egelhoff, as the beneficiary under both plans.
  • In April 1994, the Egelhoffs divorced.
  • Approximately two months after the divorce, Mr. Egelhoff died in an automobile accident without having removed Donna as the named beneficiary on his life insurance policy or pension plan.
  • At the time of his death, Donna Egelhoff remained the listed beneficiary on both ERISA-governed plans.
  • Mr. Egelhoff's children from a previous marriage, Samantha and David Egelhoff, were his statutory heirs under Washington law.

Procedural Posture:

  • Samantha and David Egelhoff sued Donna Rae Egelhoff in Washington state trial court to recover the life insurance and pension plan benefits.
  • The trial courts granted summary judgment in favor of Donna Rae Egelhoff, concluding the plans should be administered in accordance with ERISA.
  • The Washington Court of Appeals, acting as the intermediate appellate court, consolidated the cases and reversed the trial court, holding that the Washington statute was not preempted by ERISA.
  • The Supreme Court of Washington, the state's highest court, affirmed the Court of Appeals' decision.
  • The United States Supreme Court granted Donna Rae Egelhoff's petition for a writ of certiorari.

Locked

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Does the Employee Retirement Income Security Act of 1974 (ERISA) preempt a Washington state law that automatically revokes a spouse's beneficiary designation on an ERISA-governed nonprobate asset upon divorce?


Opinions:

Majority - Justice Thomas

Yes, the Washington statute is preempted by ERISA. A state law has an impermissible 'connection with' an ERISA plan if it interferes with a core area of ERISA concern, such as the administration and payment of benefits. The Washington statute dictates who the beneficiary must be, forcing plan administrators to look beyond the plan documents to state law, which contravenes ERISA's requirements that fiduciaries administer plans 'in accordance with the documents and instruments governing the plan.' This interference undermines one of ERISA's principal goals: to establish a uniform administrative scheme for processing claims and disbursing benefits, free from the complexities of differing state laws.


Dissenting - Justice Breyer

No, the Washington statute is not preempted by ERISA. The state law does not directly conflict with ERISA but merely provides a default rule of interpretation for plan documents that are silent on the effect of divorce on a beneficiary designation. This rule is designed to carry out the likely intent of the plan participant and operates in an area of traditional state regulation—family and probate law—where there is a strong presumption against preemption. The administrative burden on plan administrators is minimal, as they can easily opt out by including specific language in the plan documents, and does not justify overriding a state law that prevents an unfair windfall to a former spouse at the expense of the decedent's children.


Concurring - Justice Scalia

Yes, the Washington statute is preempted by ERISA. The state law is preempted because it directly conflicts with ERISA’s requirement that plans be administered and benefits be paid in accordance with plan documents. ERISA's 'relate to' preemption provision should be interpreted as a reference to ordinary conflict and field preemption principles. This direct conflict is a clear basis for preemption, avoiding the need to rely on the Court's often indeterminate and overly broad 'relate to' jurisprudence.



Analysis:

This decision significantly reinforces the broad preemptive scope of ERISA, establishing that the primacy of plan documents is a core principle that state laws cannot undermine. By striking down a state law governing beneficiary status—a traditional area of state family and probate law—the Court signaled that uniformity in plan administration is a paramount congressional objective. This precedent requires multi-state employers and plan administrators to adhere strictly to the designations within the plan's governing instruments, rather than navigating a patchwork of 50 different state laws concerning divorce and inheritance, thereby simplifying administration but also placing a greater burden on individuals to update their beneficiary designations after life events like divorce.

G

Gunnerbot

AI-powered case assistant

Loaded: Egelhoff v. Egelhoff (2001)

Try: "What was the holding?" or "Explain the dissent"