Mackey et al. v. Lanier Collection Agency & Service, Inc.
486 U.S. 825 (1988)
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Rule of Law:
The Employee Retirement Income Security Act of 1974 (ERISA) preempts state laws that make express reference to ERISA plans, but it does not preempt generally applicable state-law garnishment procedures, which may be used to collect judgments against participants in an ERISA welfare benefit plan.
Facts:
- Trustees (Petitioners) managed an employee benefit plan providing vacation and holiday benefits to eligible employees in several southeastern states.
- The plan qualifies as an 'employee welfare benefit plan' under the Employee Retirement Income Security Act of 1974 (ERISA).
- Covered workers would draw their vacation benefits from the plan annually.
- Lanier Collection Agency & Service, Inc. (Respondent) is a collection agency that obtained money judgments against 23 participants of the plan.
- These 23 participants owed money to Lanier's clients.
- To collect on the judgments, Lanier sought to garnish the vacation benefits that the plan owed to the 23 debtor-participants.
Procedural Posture:
- Lanier Collection Agency & Service, Inc. filed a garnishment action in a Georgia trial court.
- The trial court granted the garnishment request.
- The plan trustees (Petitioners) appealed to the Georgia Court of Appeals.
- The Georgia Court of Appeals reversed, holding that a specific state statute, Ga. Code Ann. §18-4-22.1, explicitly exempted ERISA plans from garnishment.
- Lanier (Appellee) appealed to the Georgia Supreme Court.
- The Georgia Supreme Court reversed the appellate court, holding that Ga. Code Ann. §18-4-22.1 was preempted by ERISA, and that ERISA did not bar garnishment of welfare benefits under the state's general garnishment law.
- The plan trustees petitioned the U.S. Supreme Court for a writ of certiorari, which was granted.
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Issue:
Does the Employee Retirement Income Security Act of 1974 (ERISA) preempt a state's general garnishment statute, thereby preventing creditors from garnishing benefits from an ERISA-covered employee welfare benefit plan?
Opinions:
Majority - Justice White
No, ERISA does not preempt a state's general garnishment statute as applied to employee welfare benefit plans. The court held that while a specific Georgia law exempting ERISA plans from garnishment is preempted because it explicitly 'relates to' ERISA plans by singling them out, Georgia's generally applicable garnishment statute is not. The court reasoned that ERISA plans can 'sue and be sued,' which implies that judgments against them must be enforceable, and state-law collection mechanisms like garnishment are the presumed method. Critically, Congress expressly included an anti-alienation provision to protect pension plan benefits from garnishment (in § 206(d)(1)) but deliberately omitted such protection for welfare benefit plans. This statutory silence indicates a congressional intent to permit the garnishment of welfare plan benefits.
Dissenting - Justice Kennedy
Yes, ERISA's broad preemption clause should bar the application of a state's general garnishment law to a welfare benefit plan. The dissent argued that forcing a plan to act as a garnishee imposes substantial administrative burdens and costs, which are not 'tenuous, remote, or peripheral' effects. Therefore, a state garnishment law that creates these burdens necessarily 'relates to' an employee benefit plan and is preempted under § 514(a). The dissent further contended that Congress's later enactment of a specific exception for qualified domestic relations orders implies that Congress intended for all other types of garnishment orders to be preempted.
Analysis:
This decision significantly clarifies the scope of ERISA's expansive preemption doctrine by distinguishing between two types of state laws. It establishes that any state law singling out ERISA plans for special treatment is preempted, whereas generally applicable laws that do not target ERISA plans but may have an indirect economic or administrative effect on them are not. The ruling solidifies a critical distinction between highly protected pension benefits and less protected welfare benefits, leaving welfare plan benefits vulnerable to creditors' claims. This interpretation, based heavily on statutory structure and congressional omission, has guided lower courts in determining the outer limits of ERISA preemption for decades.
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