ERISA does not preempt Illinois slayer statute

A spouse who killed her husband but was found not guilty of the crime by reason of insanity was precluded, under the Illinois Slayer Statute, from receiving his pension benefits, according to U.S. Court of Appeals in Chicago (CA-7). The subject of the law was a traditional area of state regulation and the statute incorporated well established legal principles that ERISA was not intended to supplant, the court reasoned.

Spousal killing triggers slayer statute

A spouse with a history of mental illness was found not guilty by reason of insanity of the first degree murder of her husband. The spouse, under the strict terms of the husband’s pension plan, was entitled to a monthly annuity payment of his vested pension benefits payable for life. However, in the event a deceased participant does not have a surviving spouse, the plan also provides the minor child of the individual with a monthly child’s benefit until the age of 21.
Following the participant’s murder, both the spouse and the estate of the participant’s minor child sought to recover the benefits. The union pension fund filed an interpleader action seeking a determination of the proper beneficiary.
The estate argued that a provision of the Illinois Probate Act (i.e., “slayer statute”) barred the spouse from receiving the benefits. Under the terms of the statute, a person who “intentionally and unjustifiably causes the death of another shall not receive any property, benefit, or other interest by reason of death.” The spouse, however, claimed that the Illinois statue was preempted by ERISA. A federal trial court issued judgment on the pleadings to the estate, ruling the ERISA did not preempt the slayer statute and the law barred the spouse from receiving the benefits.

Slayer statute not preempted

On appeal, the Seventh Circuit initially explained that, in the event a state law is based in a traditional area of state regulation, a “starting presumption” applies that Congress did not intend to preempt the law. Operating in the shadow of the presumption, courts, in next determining whether a state law relates to or requires an interpretation or application of the terms of an ERISA plan, will look to the objectives of ERISA and the nature of the effect of the state law on the plan.
Arguing that the Illinois law related to an ERISA plan, the spouse relied heavily on a ruling by the U.S. Supreme Court that ERISA preempted a Washington state law under which a dissolved or invalidated marriage would revoke an earlier election designating the former spouse as beneficiary (Egelhoff v. Egelhoff, 532 U.S. 141 (2001)). In concluding that ERISA preempted the state law negating the beneficiary designation following divorce, the Supreme Court explained that the statute: (1) bound ERISA plan administrators to a particular choice of rules for determining beneficiary status; (2) governed the payment of benefits; and (3) interfered with nationally uniform plan administration. Thus, the Court determined that the statute directly conflicted with ERISA’s requirement that the plan be administered and benefits paid in accordance with plan documents and, thereby imposed the burden ERISA preemption was intended to avoid.
Egelhoff did not directly involve a slayer statue and, further, seemed to suggest the ERISA would not preempt such a statute. Moreover, the Supreme Court has never addressed the specific issue of whether ERISA preempts slayer laws. However, the spouse argued that the only logical conclusion to be drawn from Egelhoff is that the Illinois slayer statute is similarly preempted by ERISA as a law that relates to an employee benefit plan.
In rejecting the spouse’s argument, the court first noted that slayer laws are a feature of family law, a traditional area of state regulation to which applies the starting presumption against preemption. In concluding that the spouse could not overcome the presumption, the court distinguished Egelhoff. Specifically, the Supreme Court found that the Washington statute had a prohibited connection with an ERISA plan; implicated a core area of ERISA concern; and interfered with national uniform plan administration. By contrast, the spouse in the instant case failed to establish that Congress intended ERISA to supplant the traditional and well established legal principle that prevents an individual from recovering benefits after the intentional killing of a spouse. Accordingly, ERISA did not preempt application of the Illinois slayer statute.
Note: A petition for certiorari has been filed with the U.S. Supreme Court posing the question of whether ERISA preempts the Illinois slayer statute. The petition relies heavily on Egelhoff, which is interpreted as holding that ERISA preempts any state law that “has a connection with or reference to” an ERISA plan (No. 17-1493, April 30, 2018).

Source: Laborers’ Pension Fund v. Miscevic v. Estate of M.M., CA-7, No. 17-2022, January 29, 2018.
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