Metropolitan Life Insurance v. Taylor

1987-04-06

Headline: ERISA-covered benefit disputes are treated as federal claims and can be moved to federal court, allowing employers and insurers to transfer state-law benefit lawsuits into federal courts and limiting state-court control.

Holding: The Court held that claims to recover benefits under an ERISA-regulated plan are federal causes of action and therefore defendants may remove state-court benefit suits to federal court under Congress's clear intent.

Real World Impact:

Allows employers and insurers to move ERISA-covered benefit suits from state to federal court.
Makes state-law contract and tort claims for benefits enforceable only under federal ERISA remedy.
Narrows where beneficiaries can pursue extra state remedies Congress did not provide.

Topics: employee benefits, ERISA preemption, federal versus state courts, removal of lawsuits

Summary

Background

A Michigan salaried employee, Arthur Taylor, worked for a car company (General Motors) and was covered by its disability plan insured by an insurance company (Metropolitan Life). After a 1961 back injury and later severe emotional problems in 1980, the insurer initially paid benefits but later stopped them after medical examinations. Taylor filed supplemental claims that were denied and was later fired; he sued in Michigan state court for money, reinstatement of benefits, and related state-law claims. The company and insurer removed the case to federal court, which granted the employer and insurer summary judgment; the Sixth Circuit then held the case was not removable.

Reasoning

The Court asked whether state-law claims that 'relate to' an ERISA plan are not only blocked by ERISA but also must be treated as federal claims under ERISA’s enforcement provision §502(a)(1)(B), so defendants can move such suits to federal court. Relying on its earlier holding that these state common-law claims are pre-empted, and on ERISA’s civil-enforcement language and legislative history comparing it to the labor law provision, the Court concluded that Congress clearly intended causes within §502(a) to be federal in character. Because Taylor’s suit fits within §502(a), the Court held it arises under federal law and is removable, and it reversed the court of appeals.

Real world impact

This ruling lets employers and insurers move ERISA-covered benefit disputes into federal court and requires beneficiaries to pursue relief under ERISA’s federal remedy rather than through separate state-law causes of action.

Dissents or concurrances

Justice Brennan, joined by Justice Marshall, emphasized the holding is narrow: removal applies only when Congress clearly intended the action to be federal, and courts should remand when that intent is not clear.