North Carolina Trial Law Blog

The WorkPlaceProf Blog has posted an interesting case which has some very minor posisbilities of being a "nose under the tent" in NC to avoid ERISA liens.  Basically, the case cited from the US Supreme Court has allowed a state to trump ERISA in order to "take" money away from a retirement plan for a prisoner to pay for his "stay" in prison. 

My thought is that if a State can usurp ERISA, and the SCOTUS allows that, why would the NC Anti-subrogation provision promulgated by our Commissioner of Insurance not do the same.  Yeah, I know it is the whole "federal preemption argument" but if we keep seeing "holes" created in ERISA, maybe one will get big enough one of these days.    I know this is a stretch.  A big stretch.

From WorkPlaceProf Blog:

Ya win some, ya lose some if you're the ERISA bar.  In this instance, whereas the Supreme Court decided to hear LaRue v. DeWolff, Boberg & Associates , 06-856, it has denied review in the ERISA inalienability case of Cox v. DaimlerChrysler (06-273).   

In Cox, SCOTUSBlog commented that the issue was whether:

it violates ERISA for a state to arrange to take 90 percent of a prison inmate's pension benefits to help defray the costs of imprisonment. The Solicitor General, asked by the Court for the government's views, had urged the Court to bypass the appeal by Michigan's state attorney general, Mike Cox.

The whole inalienability question within ERISA in the criminal context  will continue to percolate through the Courts. For example, see this post on United States v. Novak, 04-55838 (9th Cir. Feb. 22, 2007), in which the en banc Ninth Circuit found in a 10-5 decision that the Mandatory Victim Restitution Act (MVRA) trumps ERISA's anti-alienation provisions that normally would keep retirement benefits from being disturbed by others.

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Chris Nichols

www.NicholsTrialLaw.com