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Delta Air Lines Inc. v. Kramarsky

decided: May 11, 1981.

DELTA AIR LINES, INC., ALLEGHENY AIRLINES, INC.., NATIONAL AIRLINES, INC., PIEDMONT AVIATION, INC., BRANIFF AIRWAYS, INC., NORTH CENTRAL AIRLINES, INC., SOUTHERN AIRWAYS, INC., EASTERN AIR LINES, INC., NORTHWEST AIRLINES, INC., TRANS WORLD AIRLINES, INC., OZARK AIR LINES, INC., AMERICAN AIRLINES, INC., PAN AMERICAN WORLD AIRWAYS, INC., AND UNITED AIR LINES, INC., PLAINTIFFS-APPELLEES-CROSS-APPELLANTS,
v.
WERNER H. KRAMARSKY, INDIVIDUALLY AND IN HIS CAPACITY AS COMMISSIONER OF THE NEW YORK STATE DIVISION OF HUMAN RIGHTS; ANN THACHER ANDERSON, INDIVIDUALLY AND IN HER CAPACITY AS GENERAL COUNSEL OF THE NEW YORK STATE DIVISION OF HUMAN RIGHTS; THE NEW YORK STATE DIVISION OF HUMAN RIGHTS, AN AGENCY OF THE EXECUTIVE DEPARTMENT OF THE STATE OF NEW YORK; ARTHUR COOPERMAN, INDIVIDUALLY AND IN HIS CAPACITY AS CHAIRMAN OF THE NEW YORK STATE WORKMEN'S COMPENSATION BOARD; AND THE NEW YORK STATE WORKMEN'S COMPENSATION BOARD, DEFENDANTS-APPELLANTS-CROSS-APPELLANTS



Appeal and cross-appeal from a judgment of the United States District Court for the Southern District of New York, Morris E. Lasker, Judge, enjoining enforcement of N.Y. Exec. Law § 296 and dismissing plaintiff's claims against enforcement of N.Y. Work. Comp. Law § 205(3). Reversed in part, vacated in part and remanded.

Before Moore and Kearse, Circuit Judges, and Tenney, District Judge.*fn*

Author: Kearse

Defendants New York State Division of Human Rights, Werner Kramarsky, its Commissioner, and Ann Thacher Anderson, its General Counsel (collectively the "Commissioner"), appeal from so much of a judgment of the United States District Court for the Southern District of New York, Morris E. Lasker, Judge, 485 F. Supp. 300 (S.D.N.Y.1980), as enjoined them from requiring plaintiffs to alter their employee benefit plans to conform with New York's Human Rights Law, N.Y. Exec. Law § 296 (McKinney 1972 & Supp. 1980-1981) ("HRL"). Plaintiffs Delta Air Lines, Inc., et al. (the "airlines"), cross-appeal from so much of the judgment as dismissed their complaint seeking a similar injunction against enforcement by the New York State Workmen's Compensation Board and its Chairman, Arthur Cooperman (collectively the "Board"), of New York's Disability Benefits Law, N.Y. Work. Comp. Law § 205(3) (McKinney Supp. 1980-81) ("DBL"). For the reasons below we reverse the ruling as to the HRL, and vacate the ruling as to the DBL and remand for further proceedings.

I. BACKGROUND

Section 296 of the HRL requires that employee benefit plans provide coverage for disability due to pregnancy on the same basis on which other disabling conditions are covered.*fn1 Section 205(3) of the DBL requires employers to provide at least eight weeks of coverage for pregnancy-related disability.*fn2 The plaintiff airlines maintain various employee benefits plans, including sickness and accident disability plans, sick leave plans, and medical benefit plans, through which payments are made to their employees who suffer nonoccupational illnesses or injuries covered by the plans. During the periods relevant herein their plans did not provide complete coverage for disabilities or costs associated with pregnancies. Plaintiffs brought the present action seeking declaratory and injunctive relief against enforcement of the HRL and the DBL on the grounds that each is preempted by any of three federal statutes: (1) the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1381 (1976 & Supp. II 1977) ("ERISA"); (2) Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e to 2000e-17 (1976) ("Title VII"); or (3) the Railway Labor Act, 45 U.S.C. §§ 151-188 (1976) ("RLA").*fn3

A. The Statutory Grid

1. Federal and State laws relating to discrimination

Section 703(a)(1) of Title VII, enacted in 1964 as part of the Civil Rights Act, makes it unlawful for an employer to discriminate against an employee "because of ... sex." 42 U.S.C. § 2000e-2(a)(1). As originally enacted, Title VII did not specify whether or not denial of employee benefits related to pregnancy was intended to constitute discrimination because of sex. In 1976, the Supreme Court held that an employer's exclusion of pregnancy-related benefits from coverage under disability benefit plans did not constitute discrimination "because of ... sex" within the meaning of § 703(a)(1). General Electric Co. v. Gilbert, 429 U.S. 125, 97 S. Ct. 401, 50 L. Ed. 2d 343 (1976).*fn4

Like Title VII, New York's HRL prohibits discrimination in employment "because of ... sex." Unlike the United States Supreme Court, however, the New York Court of Appeals interpreted this language in its own statute to require private employers maintaining disability benefits plans to provide benefits for pregnancy on the same basis as for other covered disabilities. Brooklyn Union Gas Co. v. New York State Human Rights Appeal Board, 41 N.Y.2d 84, 390 N.Y.S.2d 884, 359 N.E.2d 393 (1976).*fn5 Soon afterward, New York amended the DBL to require employers to provide coverage for at least eight weeks of pregnancy-related disability.*fn6

As of April 29, 1979, Title VII was amended to provide that the term "because of sex" would include the meaning "because of or on the basis of pregnancy, childbirth, or related medical conditions." Pub.L. 95-555, 92 Stat. 2076 (1978). The amendment further provided that "women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work ...." 42 U.S.C. § 2000e(k) (Supp. II 1978). Thus, after April 29, 1979, the HRL was no longer broader than Title VII.

2. Federal law relating to employee benefits plans

In 1974, Congress enacted ERISA, a comprehensive federal statutory program designed to curb a variety of abuses associated with pension and other employee benefits plans, see 29 U.S.C. § 1001 (statement of congressional purpose). To protect the integrity of the federal regulatory scheme, ERISA § 514(a), 29 U.S.C. § 1144(a), provides that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in (ERISA § 4(a), 29 U.S.C. § 1003(a)) and not exempt under (ERISA § 4(b), 29 U.S.C. § 1003(b))."*fn7 Section 4(a) of ERISA extends ERISA coverage to "any employee benefit plan" maintained by an employer or union that affects interstate commerce. Section 4(b)(3) exempts from ERISA, inter alia, benefit plans "maintained solely for the purpose of complying with applicable ... disability insurance laws."*fn8

3. Federal law relating to employer-employee relations

The RLA, enacted in 1926, regulates labor relations of interstate rail carriers, and is made applicable to air carriers by 45 U.S.C. § 181. The RLA is designed to promote the collective bargaining process, and generally permits the parties to collective bargaining to agree upon whatever terms are mutually satisfactory.

B. The Airlines' Contentions

Plaintiffs contend that from December 20, 1976, when the HRL was first interpreted more broadly than Title VII, until April 29, 1979, when Title VII became as broad as the HRL, the HRL could not lawfully be applied to their employee benefit plans. Their principal contention is that because the HRL "relate(s) to" employee benefits plans within the meaning of ERISA § 514(a), that statute preempted the HRL during the above period, and thus relieved plaintiffs of any obligation to comply with it. In addition they argue that the RLA supersedes the HRL under general principles of federal labor law preemption, and that the inclusion of pregnancy benefits in its disability plan pursuant to the HRL during that period would have constituted sex discrimination against male employees in violation of Title VII.*fn9

Plaintiffs similarly contend that the DBL is preempted or superseded by ERISA, RLA and Title VII, but their challenge is not limited to the same period. Because the DBL imposes a specific minimum level of benefits for disability due to pregnancy (whereas the HRL requires only that pregnancy be treated the same as other disabilities), the DBL's command is not congruent with that of Title VII. Accordingly, plaintiffs argue that the DBL amendment was invalid from its effective date, August 3, 1977, to the present.

C. The District Court's Decision

The district court entered summary judgment in favor of plaintiffs on their claim that the HRL was preempted by ERISA, and enjoined enforcement of the HRL with respect to their employee benefit plans. In so ruling, the court relied on Pervel Industries, Inc. v. Connecticut Comm'n on Human Rights & Opportunities, 468 F. Supp. 490 (D.Conn.1978), aff'd mem., 603 F.2d 214 (2d Cir. 1979), cert. denied, 444 U.S. 1031, 100 S. Ct. 701, 62 L. Ed. 2d 667 (1980), in which this Court affirmed by summary order a ruling of then-District Judge Newman that ERISA § 514(a) preempted a Connecticut statute that is quite similar to the HRL. The court found it unnecessary to pass on the airlines' RLA and Title VII arguments concerning the HRL.

As to the DBL, the court rejected all of plaintiffs' arguments and granted the Board's motion to dismiss the complaint for failure to state a claim upon which relief could be granted. The court found that any provision of a benefit plan maintained in compliance with the DBL would be exempted from ERISA coverage by virtue of ERISA § 4(b)(3), 29 U.S.C. § 1003(b)(3), so that the preemption provisions of § 514(a) were inapplicable to the DBL. As to the RLA, the court held that the DBL regulated activity in which there was a "deeply rooted" local interest and therefore fell within an exception to the general rule that federal labor laws preempt state laws impinging on the collective bargaining process. Finally, relying on General Electric Co. v. Gilbert, supra, and City of Los Angeles Department of Water & Power v. Manhart, 435 U.S. 702, 98 S. Ct. 1370, 55 L. Ed. 2d 657 (1978), the court held that the DBL did not conflict with, and thus was not preempted by, federal antidiscrimination laws.

The Commissioner appeals from the district court's order invalidating the HRL; the airlines cross-appeal from the order upholding the DBL.

II. ENFORCEABILITY OF THE HRL

We consider first plaintiffs' claims that federal law forbade enforcement of the HRL. For the reasons below, we conclude that the HRL was not preempted by ERISA, or Title VII, or the RLA.

A. HRL and ERISA

We turn first to the question of the validity of the HRL under § 514(a) of ERISA. Although at first glance our summary affirmance in the Pervel case, discussed above, would seem to require us to find the HRL invalid, equally summary action from another quarter compels a different result.

After the decision below was rendered, the United States Supreme Court dismissed, for want of a substantial federal question, appeals from decisions of two state courts, each holding that ERISA § 514(a) does not preempt state laws similar to the HRL. Minnesota Mining & Manufacturing Co. v. Minnesota, 444 U.S. 1041, 100 S. Ct. 725, 62 L. Ed. 2d 726 (1980), dismissing appeal from 289 N.W.2d 396 (Minn.1979) (hereinafter "Minnesota" ); Mountain States Telephone & Telegraph Co. v. Commissioner of Labor & Industry, 445 U.S. 921, 100 S. Ct. 1304, 63 L. Ed. 2d 754 (1980), dismissing appeal from 187 Mont. 22, 608 P.2d 1047 (Mont.1979) (hereinafter "Mountain States" ). The Commissioner here contends that Minnesota and Mountain States require us to hold that ERISA does not preempt the HRL, despite our contrary holding, relied on below, with respect to a comparable Connecticut statute in Pervel, supra. We agree.

It is well-established that Supreme Court summary affirmances and dismissals for want of a substantial federal question are judgments on the merits that bind lower courts with respect to the "precise issues presented (to the Supreme Court) and necessarily decided" by it in disposing of the appeal. Mandel v. Bradley, 432 U.S. 173, 176, 97 S. Ct. 2238, 2240, 53 L. Ed. 2d 199 (1977) (per curiam). See also Illinois State Board of Elections v. Socialist Workers Party, 440 U.S. 173, 182-83, 99 S. Ct. 983, 989-90, 59 L. Ed. 2d 230 (1979); Washington v. Confederated Bands & Tribes of the Yakima Indian Nation, 439 U.S. 463, 477-78 n.20, 99 S. Ct. 740, 749-50 n.20, 58 L. Ed. 2d 740 (1979); Hicks v. Miranda, 422 U.S. 332, 95 S. Ct. 2281, 45 L. Ed. 2d 223 (1975). In attempting to apply the rule resulting from such a summary decision, however, lower courts must undertake a careful analysis of the precise "reach and content" of the Supreme Court's action. Mandel v. Bradley, supra, 432 U.S. at 176, 97 S. Ct. at 2240 (quoting Hicks v. Miranda, supra, 422 U.S. at 345 n.14, 95 S. Ct. at 2289 n.14). Such summary dispositions affirm only the judgment of the court below and do not necessarily adopt its reasoning. Illinois State Board of Elections v. Socialist Workers Party, supra; Mandel v. Bradley, supra. Thus, a court seeking to apply such a precedent must carefully examine ...


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