(a) A state law "relate[s] to" a covered employee benefit plan for § 514(a) purposes if it (1) has a "connection with" or (2) "reference to" such a plan. E.g., District of Columbia v. Greater Washington Bd. of Trade, 506 U.S. 125, 129. A law has the forbidden reference where it acts immediately and exclusively upon ERISA plans, as in Mackey v. Lanier CollectionAgency Service, Inc., 486 U.S. 825, or where the existence of such plans is essential to its operation, as in, e.g.,Greater Washington Bd. of Trade, supra, and Ingersoll-Rand Co. v. McClendon, 498 U.S. 133.

The District Court in Thiokol held that because Michigan's SBT has only a tenuous connection with a covered plan, it was not pre-empted by ERISA. It also held that the SBT's mere reference to such plans was insufficient to justify pre-emption absent an effect that was more than tenuous, remote, or peripheral. In doing so, the District Court in Thiokol held that District of Columbia v. Greater Wash. Bd. of Trade, 113 S.Ct. 580 (1992) did not require pre-emption solely on the basis of a reference to contributions to a covered plan. In contrast, the District Court in AKZO held that under Greater Washington, once a statute contains any reference to ERISA or to a covered plan it is thereby pre-empted.

The "breadth of § 514(a)'s pre-emptive reach is apparent from [its] language" ( Shaw v. Delta Air Lines, Inc. (1983) 463 U.S. 85, 96 [ 77 L.Ed.2d 490, 501, 103 S.Ct. 2890]), which was "chosen by Congress" to be "`deliberately expansive.'" ( District of Columbia v. Greater Washington Board of Trade (1992) 506 U.S. 125, 129 [ 121 L.Ed.2d 513, 520, 113 S.Ct. 580], quoting Pilot Life Ins. Co. v. Dedeaux (1987) 481 U.S. 41, 46 [ 95 L.Ed.2d 39, 46-47, 107 S.Ct. 1549].) The Supreme Court has variously described section 514(a) as "broadly worded" ( Ingersoll-Rand Co. v. McClendon (1990) 498 U.S. 133, 138 [ 112 L.Ed.2d 474, 483, 111 S.Ct. 478]), with an "expansive sweep" ( Pilot Life Ins. Co. v. Dedeaux, supra, 481 U.S. at p. 47 [ 95 L.Ed.2d at pp. 47-48]), and a "broad scope" ( Metropolitan Life Ins. Co. v. Massachusetts (1985) 471 U.S. 724, 739 [ 85 L.Ed.2d 728, 739-740, 105 S.Ct. 2380]).

The district court concluded, first, that the state law contains a "reference to" ERISA plans by singling out such plans for special treatment, in this case, an exemption from the burdens of the Arkansas PPA. In reaching this conclusion, the district court expressly relied on Mackey v. Lanier Collection Agency Serv., 486 U.S. 825 (1988), rather than District of Columbia v. Greater Wash. Bd. of Trade, 506 U.S. 125 (1992). The HONORABLE JAMES M. MOODY, United States District Judge for the Eastern District of Arkansas.

Instead, they are more akin to the general-garnishment statute found permissible in Mackey, 486 U.S. at 831-32, 108 S.Ct. 2182. In the third case addressed by the Court, District of Columbia v. Greater Washington Board of Trade, 506 U.S. 125, 113 S.Ct. 580, 121 L.Ed.2d 513 (1992), the Court explained that when a state law specifically refers to benefit plans regulated by ERISA, that provides a sufficient basis for preemption. Id. at 130, 113 S.Ct. 580.

A state law "relates to" an ERISA covered plan "'if it has a connection with or reference to such a plan.'" District of Columbia v. Greater Washington Bd. of Trade, ___ U.S. ___, ___, 113 S.Ct. 580, 583, 121 L.Ed.2d 513 (1992) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 103 S.Ct. 2890, 2899-2900, 77 L.Ed.2d 490 (1983)); see also Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 111 S.Ct. 478, 483, 112 L.Ed.2d 474 (1990). A state law may "relate to" a benefit plan "even if the law is not specifically designed to affect such plans, or the effect is only indirect."

It is undisputed that the Kentucky statute makes an express reference to ERISA plans. Plaintiffs argue that this reference, in itself, is sufficient to trigger preemption. To support this argument, Plaintiffs rely on District of Columbia v. Greater Washington Bd. of Trade, 506 U.S. 125, 129, 113 S.Ct. 580, 121 L.Ed.2d 513 (1992). In Greater Washington Bd. of Trade, the Supreme Court considered whether ERISA preempted a state workers compensation law which provided that

At issue before the court is whether that mere reference to, in and of itself, without any finding of effect or relationship, is enough to establish ERISA preemption. Based upon a thorough review of Supreme Court decisions, including the Supreme Court's recent pronouncement in District of Columbia v. Greater Washington Board of Trade, ___ U.S. ___, 113 S.Ct. 580, 121 L.Ed.2d 513 (1992), on circuit court and district court cases decided before and after Greater Washington, and on common sense reasoning, I conclude that a mere reference to ERISA within a state law does not, in and of itself, mandate preemption. In Shaw, the Supreme Court stated, "a law `relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan."

Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983). Hannaford rests its argument primarily on the Supreme Court's recent decision in District of Columbia v. Greater Washington Bd. of Trade, 506 U.S. 125, 113 S.Ct. 580, 121 L.Ed.2d 513 (1992). Greater Washington dealt with a District of Columbia statute that required employers who provide health insurance coverage to employees to continue that coverage during the period that those employees receive workers' compensation benefits.

Under the "reference to" inquiry, the Supreme Court has "held preempted a law that 'impos[ed] requirements by reference to [ERISA] covered programs,' . . . a law that specifically exempted ERISA plans from an otherwise generally applicable garnishment provision, . . . and a common-law cause of action premised on the existence of an ERISA plan." California Div. of Labor Standards Enforcement v. DillinghamConstr. N.A., Inc., 519 U.S. 316, ___, 117 S.Ct. 832, 837-38, 136 L.Ed.2d 791 (1997) (citations omitted) (quoting District of Columbia v. Greater Washington Bd. of Trade, 506 U.S. 125, 131, 113 S.Ct. 580, 584, 121 L.Ed.2d 513 (1992)). Thus, "[w]here a State's law acts immediately and exclusively upon ERISA plans . . . or where the existence of ERISA plans is essential to the law's operation . . . that 'reference' will result in pre-emption."