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Government Plan Exemption to ERISA Preemption: M.D. Fla.

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  • Government Plan Exemption to ERISA Preemption: M.D. Fla.

    In a case from the Orlando Division, the court discusses certain circumstances in which ERISA actions do not preempt state law. The Defendant issued the Policy to
    The Plaintiff as part of an employee benefit plan in relation to the Plaintiff’s employment with Halifax Staffing, Inc. where the Plaintiff worked at Halifax Hospital Medical Center. The Defendant argues that ERISA renders the Plaintiff’s claim federal in nature and removed the action. However, the court reasons as follows:

    ERISA generally preempts state laws relating to employee benefit plans, but exempts governmental plans—that is, those plans “established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing” (“Government Plan Exemption”). 29 U.S.C. §§ 1003(b)(1), 1002(32). ERISA does not define the terms “political subdivision,” “agency,” or “instrumentality.” At issue here is whether the employee benefit plan, administered by Staffing, is exempt. This turns on whether Staffing is an “agency or instrumentality” of “the government of any State or political subdivision thereto” for purposes of the Government Plan Exemption. In answering this question, Magistrate Judge Irick identified the two competing tests that courts apply, neither of which has been adopted by the U.S. Court of Appeals for the Eleventh Circuit. Those tests are articulated in Rose v. Long Island R.R. Pension Plan, 828 F.2d 910 (2d Cir. 1987) (”Rose Test”) and Alley v. Resolution Trust Corp., 984 F.2d 1201 (D.C. Cir. 1993) (“Alley Test”). Of these two, Magistrate Judge Irick adopted and applied the Rose Test.
    The Defendant contends that the magistrate erred in applying the Rose test, but the court was unpersuaded by this argument:

    Given the similarities between the instant case and Gunn, the Court finds no error with Magistrate Judge Irick’s adoption and application of the Rose Test. Defendant’s contrary arguments are no more compelling now than they were in Gunn. (Compare Gunn, 2014 WL 2506135, at *2, 3, 4–5 with Doc. 17, pp. 2, 11). This is especially true here because Defendant points to no intervening authority since Gunn that casts doubt on its reasoning. (See Doc. 17, pp. 2–16; see also Doc. 1, ¶ 5 (making no attempt to distinguish Gunn but instead “respectfully [disagreeing]” with it).) Absent such authority, Defendant’s re-litigation of the exact same issue, hoping for a different result based on a new audience alone, is not persuasive. Hence the Objection is due to be overruled, the R&R is due to adopted, and the Remand Motion is due to be granted.
    The order, as well as the R&R are attached below.
    Attached Files