
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 93-1874                              COMBINED MANAGEMENT, INC.,                                Plaintiff, Appellant,                                          v.                           SUPERINTENDENT OF THE BUREAU OF                           INSURANCE OF THE STATE OF MAINE,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                              FOR THE DISTRICT OF MAINE                     [Hon. D. Brock Hornby, U.S. District Judge]                                            ___________________                                 ____________________                                        Before                             Torruella, Aldrich and Cyr,                                   Circuit Judges.                                   ______________                                _____________________               Richard  G. Moon with  whom Ralph A.  Dyer was  on brief for               ________________            ______________          appellant.               James M. Bowie,  Assistant Attorney  General, Department  of               ______________          the Attorney  General, with  whom Michael E.  Carpenter, Attorney                                            _____________________          General, Linda  M.  Pistner, Director,  Regulatory  Agency  Unit,                   __________________          Department  of  the  Attorney  General,  and  Thomas  D.  Warren,                                                        __________________          Director, Litigation  Unit, Department of  the Attorney  General,          were on brief for appellee.               Robert Abrams, Attorney  General of the  State of New  York,               _____________          Jerry  Boone,  Solicitor General,  Jane  Lauer  Barker, Assistant          ____________                       ___________________          Attorney  General in  Charge  of Labor  Bureau,  and Jennifer  S.                                                               ____________          Brand,  Assistant  Attorney General,  on brief  for State  of New          _____          York, et al., amici curiae.               John  M.  Rea,  Chief  Counsel, Vanessa  L.  Holton,  Senior               _____________                   ___________________          Counsel, James D.  Fisher, Staff Counsel,  Gary J. O'Mara,  Staff                   ________________                  ______________          Counsel, Department  of Industrial  Relations,  and Lloyd  Aubry,                                                              _____________          Jr.,  Director,  Department  of  Industrial Relations,  State  of          ___          California, on brief for State of California, amicus curiae.               Marsha  S. Berzon, Michael Rubin, Indira Talwani, Altshuler,               _________________  _____________  ______________  __________          Berzon,  Nussbaum, and Berzon &  Rubin on brief  for the American          _________________      _______________          Federation of Labor and  Congress of Industrial Organizations and          the International Ladies' Garment Workers' Union,  AFL-CIO, amici          curiae.               Thomas  S.  Williamson, Jr.,  Solicitor  of  Labor, Marc  I.               ___________________________                         ________          Machiz,  Associate  Solicitor, Plan  Benefits  Security Division,          ______          Karen L.  Handorf, Counsel for Special  Litigation, Plan Benefits          _________________          Security Division, and Elizabeth A. Goodman, Trial Attorney, Plan                                 ____________________          Benefits Security  Division, U.S.  Department of Labor,  on brief          for the Secretary of Labor, amicus curiae.               Allan M. Muir  and Pierce, Atwood, Scribner, Allen,  Smith &               _____________      _________________________________________          Lancaster on brief for Maine Employers' Mutual Insurance Company,          _________          amicus curiae.               Michael  M. Sykes,  General Counsel, Oklahoma  Department of               _________________          Labor,  and  Kayla A.  Bower,  Attorney,  Oklahoma Department  of                       _______________          Labor,  on brief  for  State of  Oklahoma  ex rel.  Dave  Renfro,          Commissioner  of  Labor,  Oklahoma  Department  of Labor,  amicus          curiae.                                 ____________________                                    April 22, 1994                                 ____________________                                         -2-                    TORRUELLA,   Circuit   Judge.      Plaintiff-Appellant,                                 _______________          Combined Management,  Inc. ("CMI"),  brought an action  to enjoin          Brian   K.   Atchinson,  in   his   representative   capacity  as          Superintendent  of the Bureau of Insurance for the State of Maine          (the  "Superintendent"),  from  enforcing  certain  provisions of          Maine's workers' compensation statute.  39 M.R.S.A.   101 et seq.                                                                    __ ___          CMI  claimed that  because  CMI  provides  workers'  compensation          benefits  through a welfare benefit  plan that is  covered by the          Employee   Retirement   Income   Security  Act   ("ERISA"),   the          Superintendent's efforts to  apply the workers' compensation  law          to CMI  are preempted by  ERISA    514(a) of ERISA,  29 U.S.C.             1144(a).   The district court dismissed  CMI's complaint, finding          that ERISA did not preempt Maine law.  We affirm.                                    I.  BACKGROUND                                    I.  BACKGROUND                    CMI  is an  employee  leasing company  that leases  the          services of  its workers' to a  variety of businesses on  a long-          term   basis.     CMI   provides  employee   benefits,  including          occupational  injury  and  disability  benefits,  to  the  leased          employees through a subscription to the International Association          of  Entrepreneurs  of America  Welfare  Benefit  Plan (the  "IAEA          Plan").   The workers' compensation  portion of the  IAEA Plan is          not separately insured or administered.                    Maine state  law, 32  M.R.S.A.    14055(1)(B), mandates          that employee  leasing companies or their  client businesses must          arrange  for the  payment  of workers'  compensation benefits  in          accordance   with  the   requirements   of  the   Maine  Workers'                                         -3-          Compensation  Act,  39  M.R.S.A.    101  et  seq.   The  Workers'                                                   __  ___          Compensation  Act requires  that all  employers provide  workers'          compensation either through  an insurance  carrier authorized  by          the state or through a self-insurance plan that meets the state's          qualifications.     39-A  M.R.S.A.     403.21     Maine  requires          authorized  insurance  carriers   and  self-insurers  to  provide                                        ____________________          1  39-A M.R.S.A.   403 provides in part:                      An  employer  subject  to  [the  Workers'                      Compensation]     Act    shall     secure                      compensation  and  other benefits  to the                      employer's  employees in  one or  more of                      the ways described in this section. . . .                      1.  INSURING UNDER  WORKERS' COMPENSATION                      INSURANCE  POLICY.    The   employer  may                      comply with this section by  insuring and                      keeping  insured  the  payment   of  such                      compensation and other  benefits under  a                      workers' compensation insurance policy. .                      . .                       2. PILOT  PROJECTS.   [The  employer  may                      participate   in   an  authorized   pilot                      project.] . . .                       3.  PROOF  OF   SOLVENCY  AND   FINANCIAL                      ABILITY TO PAY; TRUST.  The  employer may                      comply  with  this section  by furnishing                      satisfactory proof  to the Superintendent                      of  Insurance  of solvency  and financial                      ability  to  pay  the   compensation  and                      benefits,     and     depositing    cash,                      satisfactory    securities,   irrevocable                      standby letters  of  credit issued  by  a                      qualified  financial   institution  or  a                      surety bond  with the board,  in such sum                      as the superintendent may determine . . .                      .                      4.   GROUP  SELF-INSURERS;   APPLICATION.                      Except  for  the  provision  relating  to                      individual public employer self-insurers,                      subsection 3 is equally applicable in all                      respects to group self-insurers.                                         -4-          evidence  of their  financial solvency  and meet  certain funding          requirements.  See, e.g., 24-A M.R.S.A.    221-A, 410, 4431-4452;                         ___  ____          39-A M.R.S.A.    403, 404.                    On January 29, 1993, the Maine Bureau of Insurance sent          a letter to CMI stating that  CMI's subscription to the IAEA Plan          did  not satisfy  its  obligation  under  state  law  to  provide          workers'  compensation   benefits  through  one  of  the  methods          authorized   by  39-A  M.R.S.A.     403.    The  letter  did  not          "constitute a formal  order or action of  the Superintendent" but          it  did warn  that failure of  CMI to  comply with  the law could          prompt some action in the future.                    One  month   later,  CMI  filed  suit   to  enjoin  the          Superintendent from  requiring CMI  to  obtain separate  workers'          compensation  insurance or  to establish  a qualified  program of          self-insurance  pursuant to 39-A M.R.S.A.   403.  CMI also sought          a  declaratory  judgment stating  that  any  enforcement of  39-A          M.R.S.A.   403 against CMI is preempted by ERISA.                    In   response  to  CMI's   request  for  a  preliminary          injunction, the magistrate judge  suggested that he first address          the   issue   of  whether   ERISA   preempted  Maine's   workers'          compensation laws.  Although CMI would have to establish that its          benefit plan, the IAEA  Plan, was an ERISA covered plan  under 29          U.S.C.     1002(3)  and 1002(37)(A)  before it  could invoke  the          protections of ERISA's preemption provision, the magistrate noted          that determining the status of the IAEA Plan would involve a fact          intensive inquiry requiring additional discovery.  Instead,  with                                         -5-          the  agreement of  the parties, the  magistrate ordered  that the          preemption issue be addressed first  on the understanding that if          he found ERISA did not  preempt Maine law, he would then  dismiss          the  case.  Thus, for  purposes of this  threshold question only,          the IAEA Plan is assumed to be a valid ERISA benefit plan.                    On June  15, 1993, the magistrate  recommended a denial          of the requested  preliminary injunction and  a dismissal of  the          case on the grounds  that ERISA did not preempt  Maine's workers'          compensation  law.    The  magistrate  found  that  the  workers'          compensation law did not "relate to" the IAEA Plan offered by CMI          because  the law is a matter of general application affecting all          private employers, whether or not they have adopted  ERISA plans,          and   because   the   law   does  not   affect   the   structure,          administration, or type of benefits  provided by any ERISA  plan.          On  August 2, 1993, the  district court affirmed  and adopted the          magistrate's  recommended   decision.    CMI  now   appeals  this          decision.                                II.  ERISA PREEMPTION                                II.  ERISA PREEMPTION                    ERISA  preempts state  laws that  "relate to"  an ERISA          covered  welfare  benefit  plan.    ERISA     514(a),  29  U.S.C.            1144(a).2  A  state law "relates to" an ERISA covered plan "'if                                        ____________________          2  Section 514(a) provides that the provisions of ERISA:                      shall  supersede any  and all  State laws                      insofar  as  they  may now  or  hereafter                      relate  to  any  employee   benefit  plan                      described  in  section  1003(a)  of  this                      title  and  not   exempt  under   section                      1003(b) of this title.                                         -6-          it has a connection with or reference to such a plan.'"  District                                                                   ________          of  Columbia v. Greater Washington Bd. of  Trade, 113 S. Ct. 580,          ____________    ________________________________          583 (1992) (quoting Shaw v.  Delta Air Lines, Inc., 463 U.S.  85,                              ____     _____________________          96-97 (1983)); see also Ingersoll-Rand Co. v. McClendon, 498 U.S.                         ________ __________________    _________          133, 139  (1990).  A  state law  may "relate to"  a benefit  plan          "even  if the  law is  not specifically  designed to  affect such          plans, or the effect  is only indirect."  Greater  Washington Bd.                                                    _______________________          of Trade, 113 S. Ct. at  583 (quoting Ingersoll-Rand, 498 U.S. at          ________                              ______________          139).  However, preemption will not occur where the state law has          only a  "tenuous, remote, or peripheral"  connection with covered          plans,  "as is the case with many laws of general applicability."          Id. at  583 n.1  (citing Shaw,  463 U.S. at  100 n.21);  see also          __                       ____                            ________          Mackey v. Lanier Collection  Agency & Serv., Inc., 486  U.S. 825,          ______    _______________________________________          830-38 (1988).                    State  laws that  do not  "relate to" an  ERISA covered          plan but instead "relate to" a benefit plan established solely to          comply with state workers' compensation laws are not preempted by          ERISA.     Section  514(a);   ERISA      4(b)(3),  29   U.S.C.             1003(b)(3).3   As Maine's workers' compensation  law falls within                                        ____________________          29 U.S.C.   1144(a).          3  Section  4(b)(3) provides that  ERISA shall  not apply to  any          employee benefit plan if:                      such  plan is  maintained solely  for the                      purpose  of   complying  with  applicable                      workmen's     compensation    laws     or                      unemployment  compensation  or disability                      insurance laws.          29 U.S.C.   1003(b)(3).                                         -7-          this   special  exemption,   we  affirm   the  district   court's          determination  that ERISA  does not  preempt any  efforts by  the          Superintendent to require  CMI to  provide workers'  compensation          benefits  through an authorized  insurance provider  or qualified          self-insurance.  See Employee Staffing Servs., Inc. v. Aubry, No.                           ___ ______________________________    _____          93-15482,  1994   WL  109731   (9th  Cir.  1994)   (holding  that          California's workers' compensation law, which is quite similar to          Maine's, is not preempted by ERISA).                    A.  The Workers' Compensation Exemption                    A.  The Workers' Compensation Exemption                        ___________________________________                    Congress    explicitly    exempted    state    workers'          compensation schemes from ERISA's purview,  see H.R. Rep. No. 93-                                                      ___          1280, 93d Cong., 2d Sess. 383 (1974), reprinted in 1974 U.S. Code                                                ____________          Cong. &  Admin.  News  5038, 5162,  leaving  intact  the  states'          traditional regulation and oversight  of this specialized  system          of insurance.  See  also 28 U.S.C.   1445(c)  (forbidding removal                         _________          of workers' compensation benefits  claims to federal court).   In          the statute,    4(b)(3) excludes benefit plans  created solely to          comply  with state workers'  compensation statutes  from coverage          under  ERISA, and    514(a) excludes  from preemption  state laws          that  relate to those  plans described in    4(b).   29 U.S.C.             1003(b) and 1144(a).  Some state workers' compensation laws might          "relate to"  ERISA  covered  benefit plans,  instead  of,  or  in          addition  to, plans exempt under    4(b)(3), and  thus fall under          the broad sweep of ERISA's preemption clause.  Greater Washington                                                         __________________          Bd.  of Trade, 113 S. Ct.  at 584-85.  Laws  which relate only to          _____________                                             ____          welfare benefit plans exempt  from ERISA's coverage, however, fit                                         -8-          safely under the umbrella of   4(b)'s exemption.  Id.                                                            __                    In Shaw v. Delta  Air Lines, Inc., 463 U.S.  85, 106-09                       ____    ______________________          (1983), the  Supreme  Court held  in  part that  a New  York  law          mandating  the  provision  of  certain  disability   benefits  to          employees  was exempt from  preemption under ERISA  pursuant to            4(b)(3),   even  though  employers  could  provide  the  required          benefits through  their ERISA covered plans.   Because disability          benefit laws  are  exempted from  ERISA's  coverage by  the  same          provision  exempting workers'  compensation laws,    4(b)(3),  29          U.S.C.    1003(b)(3), the Shaw decision applies  directly to this                                    ____          case.  The Supreme Court found in Shaw that:                                            ____                      A  State  may   require  an  employer  to                      maintain a disability plan complying with                      state  law  as a  separate administrative                      unit.  Such a  plan would be exempt under                        4(b)(3). .  . .  [W]hile the State  may                      not  require an  employer  to  alter  its                      ERISA plan, it may  force the employer to                      choose   between   providing   disability                      benefits  in  a  separately  administered                      plan  and  including  the  state-mandated                      benefits in its ERISA plan.  If the State                      is  not satisfied  that  the  ERISA  plan                      comports  with  the  requirements of  its                      disability insurance law,  it may  compel                      the  employer to maintain a separate plan                      that does comply.          Id. at 108.  See also Greater Washington Bd. of Trade, 113 S. Ct.                       ________ _______________________________          at 584-85 (reaffirming the holding in Shaw).                                                ____                    The  Supreme   Court  also  noted   that  although  the          exemption in    4(b)(3)  applies only to  separately administered          disability plans maintained solely to  comply with state law, and          does  not include  ERISA  covered benefit  plans  that provide  a          combination of exempt and non-exempt benefits, employers are not:                                         -9-                      completely   free   to   circumvent   the                      Disability Benefits Law by adopting plans                      that combine disability benefits inferior                      to those  required by that law with other                      types of benefits.   Congress surely  did                      not intend, at the same time it preserved                      the role  of  state disability  laws,  to                      make    enforcement    of   those    laws                      impossible.          Shaw, 463 U.S. at 108.          ____                    Maine's workers' compensation law falls squarely within          the  dictates of  Shaw.    29-A  M.S.R.A.     403  mandates  that                            ____          employers  provide workers'  compensation by  purchasing approved          insurance or  by  establishing an  approved self-insurance  plan.          This is  precisely what the  Supreme Court  contemplated when  it          found  that  states "may  require an  employer  to maintain  a [           4(b)(3)  exempt] plan as  a separate administrative  unit."  Id.;                                                                       __          accord Greater Washington Bd. of Trade, 113 S. Ct. at 584-85.  In          ______ _______________________________          the present  case, the  Superintendent expressed an  opinion that          CMI's  subscription  to  the  IAEA  Plan  does  not  satisfy  the          requirements of  Maine's law.   Further  efforts to  ensure CMI's          compliance  with the  law  would  clearly  constitute an  act  to          "compel  the  employer to  maintain  a  separate plan  that  does          comply"  with the  workers'  compensation law,  an  act which  is          explicitly approved of by Shaw.  Shaw, 463 U.S. at 108.                                    ____   ____                    Even though CMI provides workers' compensation benefits          through the IAEA Plan, which we assumed is an ERISA covered plan,          Maine's law does  not require,  and the  Superintendent does  not          request, that  CMI alter the IAEA  Plan in any way  or provide or                                         -10-          not provide certain benefits through the IAEA Plan.  In fact, the          Maine law  imposes no limitations or  requirements, regulatory or          otherwise,  on  the  IAEA Plan  or  on  any  ERISA covered  plan.          Consequently, it does  not "relate  to" an ERISA  plan such  that          preemption is triggered.  In such a situation, CMI cannot don the          mantle   of  ERISA   preemption  simply  by   including  workers'          compensation  benefits in  its welfare  benefit plan  and thereby          escape the  requirements of Maine's law.   See Shaw, 463  U.S. at                                                     ___ ____          108;  Foust v.  City Ins. Co.,  704 F.  Supp. 752,  754 (W.D.Tex.                _____     _____________          1989).                    CMI  misinterprets Shaw  to hold  that states  can only                                       ____          require  employers to  provide  a specified  level or  package of          workers'  compensation  benefits and  cannot  otherwise interfere          with plan administration through  provisions like the funding and          solvency requirements  established in 39-A  M.S.R.A.   403.   CMI          would  thus limit  the ERISA  exemption under    4(b)(3)  to laws          mandating benefit outputs  instead of laws establishing  separate          benefit plans.  As a  corollary to this claim, CMI  contends that          Shaw  requires states to give employers a choice of providing the          ____          specified benefits  in its own ERISA plan  or in a state mandated          benefits  plan.  CMI maintains that  because ERISA allows welfare          benefit plans to provide workers' compensation benefits, refusing          to give CMI  the option  of providing such  benefits through  the          IAEA plan would effectively  bar what ERISA permits.   See Alessi                                                                 ___ ______          v. Raybestos-Manhattan,  Inc., 451 U.S. 504,  524 (1981) (finding             __________________________          state  law  that  barred   one  method  of  calculating  benefits                                         -11-          permitted by ERISA to be preempted).                    CMI cites several cases for the proposition that states          may  not  force  employers  to   separate  workers'  compensation                                      _____________          benefits from their fully integrated ERISA plans.  Id. at 521-26;                                                             __          PPG  Industries Pension Plan A  v. Crews, 902  F.2d 1148, 1150-51          ______________________________     _____          (4th  Cir. 1990).   CMI  extends this  proposition to  argue that          states  are  also prohibited  from  forcing employers  to  set up                                                                 __________          separate workers' compensation plans.                    Although  ERISA preempts  state laws  that prohibit  an          ERISA  covered  plan  from  providing certain  benefits  or  from          calculating benefits in a certain  way (including laws that would          force a plan to separate out a portion of its existing coverage),                       ___________          we find  no  support  in  Shaw,  or any  other  case,  for  CMI's                                    ____          proposition that  ERISA preempts state laws  that force employers          to adopt a separately administered workers' compensation benefits          ________          plan.    On the  contrary,    4(b)(3)  and Shaw  itself expressly                                                     ____          permit states to do just that.  Shaw, 463 U.S. at 108.  Shaw does                                          ____                    ____          not require states to give employers the option of complying with          state law  by providing  workers' compensation benefits  in their          ERISA  covered  plans.   Instead,  Shaw  merely states  that  the                                             ____          existence  of such  an  option does  not automatically  result in          preemption,  id.  at 108;  it  certainly  does  not  suggest  the                       __          converse  proposition,  that  an  option is  required  for  the            4(b)(3)  exemption to  apply.   See Barker  v. Pick  N  Pull Auto                                          ___ ______     __________________          Dismantlers,  Inc.,  819 F.  Supp.  889,  891-96 (E.D.Cal.  1993)          __________________          (rejecting the  identical argument  that Shaw requires  states to                                                   ____                                         -12-          offer  employers the  option of  providing workers'  compensation          through their ERISA plans).4                    Likewise,  Shaw  does  not  limit the  exemption  under                               ____            4(b) (3) to state laws mandating a specific level or package of          benefits  as  opposed  to  laws mandating  solvency  and  funding          requirements.   There  is  no basis  for  this distinction  in             4(b)(3)  or in  Shaw.   Additionally, the  language of  those two                          ____          authorities  indicates that  the case  for exemption  of solvency          requirements  is even  stronger than  the case  for exemption  of          benefit  requirements.  See   4(b)   (3), 29  U.S.C.   1003(b)(3)                                  ___          (stating  that the  provisions of  ERISA shall  not apply  to any          employee  benefit plan if "such plan is maintained solely for the                                          ____          purpose of complying with applicable workmen's compensation laws)                                                                      ____          (emphasis  added); Shaw, 463 U.S. at 108 (stating that states can                             ____          require employers to comply with the "requirements" of its law by          setting up  "a separate  administrative unit"); see  also Barker,                                                          _________ ______          819  F. Supp.  at  895  (finding  that  "Shaw  does  not  address                                                   ____          'benefits' but speaks only of 'requirements,'" and that a state's          concern about the solvency of a workers' compensation plan is "of          equal stature  as any concern as to the level of benefits.").  If          anything, state  laws mandating  specific benefits from  an ERISA          covered plan are more likely to "relate  to" that ERISA plan than                                        ____________________          4   We note that  this case differs  from our recent  decision in          Simas v. Quaker  Fabric Corp., 6 F.3d 849 (1st  Cir. 1993), where          _____    ____________________          we  held that states cannot mandate the establishment of an ERISA          covered plan.  Id.  That holding does not apply to state workers'                         __          compensation laws such as Maine's which mandate the establishment          of exempt, non-ERISA covered plans.                                         -13-          laws which merely  require the creation  of an ERISA-exempt  plan          and  which  make no  demands on  the  ERISA covered  plan itself.          Thus,  the instant case presents an even clearer application of            4(b)(3)'s exemption than does Shaw.                                        ____                    Maine's law  does  not bar  what  ERISA permits.    CMI          remains  free  to  provide  the  existing  workers'  compensation          benefits to its employees and to integrate such benefits with the          rest of  its ERISA plan benefits.   We are not  presented in this          case with a state workers'  compensation law that prohibits ERISA          covered plans from calculating pension benefits in a certain way,          see  Alessi, 451 U.S. at 521-26 (finding that ERISA preempted New          ___  ______          Jersey law  that prohibited  ERISA plans from  offsetting pension          benefits by  amounts  awarded  for  workers'  compensation);  PPG                                                                        ___          Industries,  902  F.2d at  1150-51  (finding  preemption of  West          __________          Virginia  law  that prohibited  an  employer  from deducting  the          amount  of pension benefits previously paid to a retiree from the          retiree's subsequent workers' compensation  award), or a law that          specifically refers  to ERISA covered  benefit plans in  order to          determine  workers' compensation benefits, see Greater Washington                                                     ___ __________________          Bd. of Trade, 113 S. Ct. at 583-85 (holding that  ERISA preempted          ____________          District  of Columbia  law requiring  that employers  who provide          health insurance coverage for their employees under an ERISA plan          must  provide equivalent  health insurance  coverage for  injured          employees eligible for workers' compensation).  These cases cited          by CMI in support  of its misguided interpretation of  Shaw found                                                                 ____          preemption  for reasons  that  do not  apply  to this  case.   We                                         -14-          therefore  find that  a  state  law  that requires  employers  to          operate  a separately administered  workers' compensation benefit          plan is not preempted by ERISA.               B.  Does Maine's Law Nevertheless "Relate To" the IAEA Plan?               B.  Does Maine's Law Nevertheless "Relate To" the IAEA Plan?                   ________________________________________________________                    CMI  further argues that  Maine's workers' compensation          law relates to an ERISA plan, and thus is  preempted, because the          law  affects  the  cost  of  providing   ERISA  benefits  to  its          employees.  Specifically,  CMI alleges  that if it  is forced  to          adopt  a  separate workers'  compensation  plan,  the burdens  of          duplicate administration and the higher cost of separate workers'          compensation benefits  provided  outside of  the integrated  IAEA          Plan  will have a significant  economic impact on  CMI and render          CMI unable to afford  the existing level of benefits  now offered          through the  IAEA  Plan.   According  to CMI,  a state  law  that          creates a significant economic  impact on an ERISA plan,  without          more,  sufficiently  "relates  to"  the  plan  and  is  therefore          preempted.   E-Systems, Inc. v.  Pogue, 929 F.2d  1100, 1103 (5th                       _______________     _____          Cir.), cert. denied, 112 S. Ct. 585 (1991); Travelers Ins. Co. v.                 ____  ______                         __________________          Cuomo, 813 F. Supp. 996, 1002-06 (S.D.N.Y. 1993).5          _____                    To  begin  with,  we   decline  to  address  whether  a                                        ____________________          5  As CMI points out, Travelers cites FMC Corp.  v. Holliday, 498                                _________       _________     ________          U.S. 52, 58-60 (1990),  for the proposition that state  laws that          increase  plan costs are preempted.   Travelers, 813  F. Supp. at                                                _________          1006.  FMC Corp. v. Holliday makes no mention of  state laws that                 _________    ________          merely impose additional costs.  Instead, the Supreme Court found          that state laws  interfering with an ERISA  plan's calculation of          benefits, in that case  through a state antisubrogation  law, was          preempted.  FMC  Corp., 498 U.S. at 58-60.   Although we need not                      __________          decide  the issue in this case, the question of whether increased          costs alone can trigger preemption is far from settled.                                         -15-          significant  economic  impact on  an  ERISA covered  plan  may be          sufficient by itself to trigger preemption because CMI's argument          fails regardless of  how that  issue is resolved.   The  argument          fails  for two reasons.  First, CMI's  claim is at odds with Shaw                                                                       ____          and Greater Washington Bd.  of Trade, in which the  Supreme Court              ________________________________          explicitly  contemplated   state  laws  requiring   the  separate          administration of workers'  compensation plans without  "relating          to" existing ERISA plans.   Greater Washington Bd. of  Trade, 113                                      ________________________________          S. Ct. at 584-85; Shaw, 463 U.S. at 108.                            ____                    Second, Maine's law, while having an economic impact on          CMI, does not  have an economic impact  on the IAEA Plan  itself.          Clearly,  any  law  that  increases  a  company's  cost of  doing          business can be said to affect that business's ability to provide          benefits under its welfare benefit  plan.  This is not the  same,          however, as  imposing burdens on the welfare benefit plan itself.          The increased cost or administrative burdens imposed by the state          law  must have some connection  to the covered  ERISA plan before          the preemption analysis  can come  into play.   See United  Wire,                                                          ___ _____________          Metal  and  Machine Health  &  Welfare Fund,  v.  Morristown Mem.          ____________________________________________      _______________          Hosp., 995 F.2d  1181, 1193 (3d  Cir. 1993) ("Where  there is  no          _____          direct nexus between a  state statute and ERISA plans,  no effect          on the manner of such plans' conducting business or their ability          to  operate  in interstate  commerce,  statues  have been  upheld          despite  the fact that they may have the indirect ultimate effect          of increasing plan costs.").                    In  requiring  CMI  to  provide  separate  coverage for                                         -16-          workers' compensation,  Maine does  not increase  the operational          expenses or  input costs of the  IAEA Plan,6  nor  does it impose          any additional  administrative burdens, benefit  requirements, or          other obligations on  the IAEA  Plan.  Maine's  law may  increase          CMI's cost  of doing business,  but it  does not affect  the IAEA          Plan's  cost of  providing benefits  or costs  of administration.          Should CMI choose  voluntarily to change  its coverage under  the          IAEA Plan in response to Maine's law, we consider such a decision          to  constitute, at  most,  an  effect  of the  law  that  is  too          "tenuous"  and  "remote" to  warrant  preemption.   See  Employee                                                              ___  ________          Staffing  Servs., Inc.  v. Aubry,  No. C-92-4096,  1993 WL  83310          ______________________     _____          (N.D.Cal. Mar.  17, 1993), aff'd,  No. 93-15482,  1994 WL  109731                                     _____          (9th  Cir. 1994); cf. Mackey v. Lanier Collection Agency & Serv.,                            __  ______    _________________________________          Inc., 486  U.S. 825, 831-32 (1988)  (finding generally applicable          ____          state  garnishment law  did not  "relate to" ERISA  covered plans          even  though  the law  might  burden the  administration  of such          plans);  Aetna Life Ins. Co. v.  Borges, 869 F.2d 142, 145-46 (2d                   ___________________     ______          Cir.), cert. denied,  493 U.S. 811 (1989)  (finding state escheat                 ____  ______          law did  not "relate to" ERISA  plans and noting that  ERISA does          not preempt many  laws that  have a minimal,  indirect impact  on                                        ____________________          6  In contrast,  two cases that defendant relies  upon, E-Systems                                                                  _________          and  Travelers, involve  laws  that increase  the  costs of  plan               _________          operation.  See E-Systems, 929 F.2d at 1103 (finding that because                      ___ _________          the state  tax in that case  was collected from  an ERISA covered          plan, the "cost of the plan must therefore increase"); Travelers,                                                                 _________          813 F. Supp. at  1003 (finding "little doubt that  the Surcharges          at  issue  will  have  a  significant effect  on  the  commercial          insurers  and HMOs which do  or could provide  coverage for ERISA          plans  and thus lead, at least indirectly, to an increase in plan          costs") (footnote omitted).                                         -17-          plan   administration);  Martori  Bros.  Distributors  v.  James-                                   ____________________________      ______          Massengale, 781 F.2d 1349, 1358-59  (9th Cir.), cert. denied, 479          __________                                      ____  ______          U.S. 1018  (1986) (finding  state unfair labor  practices statute          that  required employers to pay  damages based in  part on fringe          benefits employees would have received if employers had bargained          in  good faith  did not  "relate  to" an  ERISA plan).   We  find          therefore  that Maine's law does not "relate to" an ERISA covered          plan and is not thereby preempted.                    Accordingly,  the  order  of   the  district  court  is                    _______________________________________________________          affirmed.          ________                                         -18-
