De Buono v. NYSA-ILA Med. and Clinical Servs. Fund
In De Buono v. NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S. 806 (1997), the U.S. Supreme Court held that the Employee Retirement Income Security Act (ERISA) does not preempt pre-emption and preclude New York from imposing a gross receipts tax on the income of medical centers operated by ERISA funds. The Court held that New York may collect its tax. Put another way, the Court held that hospitals operated by ERISA plans are subject to the same laws as other hospitals.
Justice John Paul Stevens, writing for the 7-2 Court, wrote that:
- There is nothing in the operation of the HFA that convinces us it is the type of state law that Congress intended ERISA to supersede. This is not a case in which New York has forbidden a method of calculating pension benefits that federal law permits, or required employers to provide certain benefits. Nor is it a case in which the existence of a pension plan is a critical element of a state law cause of action, or one in which the state statute contains provisions that expressly refer to ERISA or ERISA plans.
"It is the duty of this court to see to it that the jurisdiction of the Circuit Court, which is defined and limited by statute, is not exceeded." Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152, 53 L. Ed. 126, 29 S. Ct. 42 (1908). Despite our obligation to examine federal-court jurisdiction even if the issue is not raised by either party, ibid., and despite the Court's explicit acknowledgement, ante, at 3, n. 5, of the possibility that jurisdiction over this case is barred by the Tax Injunction Act, 28 U.S.C. § 1341, the Court proceeds to decide the merits of respondents' ERISA pre-emption challenge. The Court offers two grounds for passing over the threshold question of jurisdiction: our "settled practice of according respect to the courts of appeals' greater familiarity with issues of state law," and petitioner's "active participation in nearly four years of federal litigation with no complaint about federal jurisdiction." Ante, at 4, n. 5. In my view, neither of these factors justifies our proceeding without resolving the issue of jurisdiction.
- The Tax Injunction Act bars federal-court jurisdiction over an action seeking to enjoin a state tax (such as the one at issue here) where "a plain, speedy and efficient remedy may be had in the Courts of such State." 28 U.S.C. § 1341; see Arkansas v. Farm Credit Servs. of Central Ark., post, at 3 (describing the Act as a "jurisdictional rule" and "broad jurisdictional barrier"). The District Court in this case suggested that the Tax Injunction Act might not bar jurisdiction here, since New York courts might not afford respondents a "plain" remedy within the meaning of the Act. See NYSA-ILA Medical and Clinical Services Fund v. Axelrod, 1993 U.S. Dist. LEXIS 2011, No. 92 Civ. 2779 (SDNY, Feb. 18, 1993), App. to Pet. for Cert. 19a. That suggestion was not, however, based upon the District Court's resolution of any "issues of state law," as today's opinion intimates, ante, at 4, n. 5; rather, it rested upon the District Court's conclusion that uncertainty over the implications of a federal statute-- § 502(e)(1) of ERISA, 29 U.S.C. § 1132(e)(1)--might render the availability of a state court remedy not "plain." App. to Pet. for Cert. 19a. * The Court of Appeals, in turn, made no mention of the jurisdictional issue, presumably because, under controlling Circuit precedent, jurisdiction was secure: The Second Circuit had previously held that state courts could not provide any remedy for ERISA-based challenges to state taxes within the meaning of the Tax Injunction Act, since "Congress has divested the state courts of jurisdiction" over ERISA claims. Travelers Ins. Co. v. Cuomo, 14 F.3d 708, 714 (1993) (citing ERISA § 502(e)(1), 29 U.S.C. § 1132(e)(1)), rev'd on other grounds sub nom. New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 131 L. Ed. 2d 695, 115 S. Ct. 1671 (1995). That holding (like the District Court's discussion of the issue in this case) in no way turns on New York state law, so I am at a loss to understand the Court's invocation [*819] of "our settled practice of according respect to the courts' of appeals' greater familiarity with issues of state law," ante, at 4, n. 5, as a basis for overlooking the question whether the Tax Injunction Act bars federal-court jurisdiction. ...
- I have previously noted the split among the Circuits on the question whether the Tax Injunction Act deprives federal courts of jurisdiction over ERISA-based challenges to state taxes. See Barnes v. E-Systems, Inc. Group Hospital Medical & Surgical Ins. Plan, 501 U.S. 1301, 1302-1303, 115 L. Ed. 2d 1087, 112 S. Ct. 1 (1991) (SCALIA, J., in chambers). In a prior case, we expressly left the question open, saying that "we express no opinion [on] whether a party [can] sue under ERISA to enjoin or to declare invalid a state tax levy, despite the Tax Injunction Act"; we noted that the answer would depend on whether "state law provides no 'speedy and efficient remedy'" and on whether "Congress intended § 502 of ERISA to be an exception to the Tax Injunction Act." Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 20, n. 21, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983). Because I am uncertain of the federal courts' jurisdiction over this case, I would set the jurisdictional issue for briefing and argument, and would resolve that issue before reaching the merits of respondents' ERISA pre-emption claim. Accordingly, I respectfully dissent from today's opinion.