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                                                               Electronically Filed
                                                               Supreme Court
                                                               SCWC-30286
                                                               27-MAY-2015
                                                               09:41 AM




            IN THE SUPREME COURT OF THE STATE OF HAWAII

                            ---o0o---
________________________________________________________________

                            GARY W. RODRIGUES,
                    Petitioner/Plaintiff-Appellant,

                                     vs.

       UNITED PUBLIC WORKERS, AFSCME LOCAL 646, AFL-CIO,
                 Respondent/Defendant-Appellee.
________________________________________________________________

                                  SCWC-30286

          CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
                (ICA NO. 30286; CIV. NO. 08-1-2538)

                               MAY 27, 2015

 RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

                  OPINION OF THE COURT BY WILSON, J.

                             I.   Introduction

           Petitioner Gary Rodrigues (Rodrigues) is the former

State Director of United Public Workers, AFSCME Local 646, AFL-


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CIO (UPW) and a former administrator of UPW’s Mutual Aid Fund

trust (MAF), an employee benefit plan established to provide

hospital and related benefits to UPW members and their families.

            In 1998, Rodrigues, as the MAF’s plan administrator,

made six loans totaling $1.1 million to Best Rescue Systems,

Inc. (Best Rescue) a startup company located in Florida.             Best

Rescue never repaid the loans and in October 2003, the MAF filed

a complaint in the United States District Court for the District

of Hawaii (federal district court) alleging, inter alia, that

Rodrigues was negligent in making the loans and had thus

breached his fiduciary duties as plan administrator to the MAF.

            The federal district court1 found that the MAF is an

Employee Retirement Income Security Act (ERISA) plan under 29

U.S.C. § 1002(1) and that Rodrigues breached his fiduciary

duties to the MAF.      DeCosta v. Rodrigues, Civ. No. 03-00598 DAE-

LEK, 2008 WL 1815716, at *6, *12 (D. Haw. Mar. 20, 2008), aff’d

sub nom. De Costa v. Rodrigues, 334 F. App’x 807 (9th Cir.

2009).   The federal district court held Rodrigues liable for

making imprudent investments under ERISA and entered judgment

against him for five of the six failed loans in the amount of

$850,000.    Id. at *14.


     1
            The Honorable David Alan Ezra presided.



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           In 2008, Rodrigues filed a complaint in the Circuit

Court of the First Circuit (circuit court) seeking that UPW

indemnify him for the $850,000 plus attorneys’ fees and costs

incurred in defending the federal lawsuit on the grounds that

his liability to the MAF arose from actions he took solely in

his capacity as agent for UPW and/or that UPW ratified his

actions.   UPW responded that Rodrigues was not entitled to

indemnification because he was negligent in making the loans,

and his indemnification claims were preempted by ERISA.             The

circuit court agreed with UPW and granted summary judgment in

favor of UPW.

           Rodrigues appealed to the Intermediate Court of

Appeals (ICA) arguing that his state indemnification claims were

not preempted under ERISA’s “implied conflict” doctrine because

they did not “duplicate, supplement, or supplant” remedies

provided by ERISA’s civil enforcement scheme.           The ICA held that

ERISA did not preempt Rodrigues’ indemnification claims but

affirmed the circuit court, stating that “[b]ecause Rodrigues is

responsible for his own conduct, he is not entitled to be

indemnified for his negligent acts as a matter of law.”

Rodrigues v. United Public Workers, No. 30286, 2014 WL 983024,

at *12 (App. Mar. 13, 2014).

           Rodrigues’ state indemnity claim derives from the


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federal district court’s conclusion that Rodrigues breached his

fiduciary duties to the MAF Plan, an employee benefit plan under

ERISA.   Thus, we must enter the “ERISA preemption thicket” to

determine whether Rodrigues’ state law claim survives

preemption.     Gonzales v. Prudential Ins. Co. of Am., 901 F.2d

446, 451-52 (5th Cir. 1990) (“Obviously, any court forced to

enter the ERISA preemption thicket sets out on a treacherous

path.”), superseded by statute on other grounds as recognized in

Guidry v. Nw. Mut. Life Ins. Co., 88 F. App’x 12, 13-14 (5th

Cir. 2004).

             Rodrigues requested certiorari on the ground that the

ICA erred in concluding that his negligence defeats his

indemnification claim as a matter of law.          We do not reach this

issue because we hold that ERISA preemption, not his negligence,

defeats Rodrigues’ state indemnity claims against UPW as a

matter of law.

                             II.   Background

A.   Facts

             Rodrigues was the State Director of UPW from 1981

until 2002.     UPW is a labor union representing government

employees as well as those who work in the private sector.              In

July of 1984, UPW established the MAF.          More than 10,000 persons

participate in the MAF.      The MAF is funded entirely by


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contributions from UPW members, UPW employees, and its

dependents; employers do not contribute to the MAF.            A majority

of employee participants are employed by the government.

Although the MAF is a 501(c)(9) trust and is a separate legal

entity from UPW, the MAF’s Board of Trustees (Board) includes

the President, Secretary-Treasurer, and the Vice Presidents of

five UPW divisions: Private Sector, Oahu, Maui, Kauai, and the

Big Island.    As State Director, Rodrigues was not a member of

the Board; however, under the terms of the “Administrative

Services Agreement” entered between UPW and the MAF Board, UPW

agreed to “[r]eceive, collect, hold, invest and disburse all

money payable to or by the [MAF]” through its State Director

acting on behalf of UPW.

           Beginning in 1998, Rodrigues acted as the MAF plan

administrator to make six loans totaling $1.1 million to Best

Rescue, a startup company located in Florida.           Best Rescue never

returned the money.      On October 31, 2003, the MAF filed a

complaint in federal district court, seeking recovery from

Rodrigues for all of the MAF’s losses resulting from its

investments in Best Rescue.

B.   Federal District Court Proceedings

           The MAF alleged the following counts in its federal

district court complaint: (1) breach of fiduciary duty in


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violation of 29 U.S.C. § 1104(a)(1)(A);2 (2) breach of fiduciary

duty by co-fiduciary pursuant to 29 U.S.C. § 1105;3 and (3)

engaging in prohibited transactions in violation of 29 U.S.C.

§ 1106(a)(1)(D).4


     2
           29 U.S.C. § 1104(a)(1)(A) (2012) provides:

           (a) Prudent man standard of care
                 (1) Subject to sections 1103(c) and (d), 1342, and
                 1344 of this title, a fiduciary shall discharge his
                 duties with respect to a plan solely in the interest
                 of the participants and beneficiaries and—
                       (A) for the exclusive purpose of:
                             (i) providing benefits to participants
                             and their beneficiaries; and
                             (ii) defraying reasonable expenses of
                             administering the plan[.]

     3
           29 U.S.C. § 1105(a) (2012) states in relevant part:

                 [A] fiduciary with respect to a plan shall be liable
           for a breach of fiduciary responsibility of another
           fiduciary with respect to the same plan in the following
           circumstances:
                       (1) if he participates knowingly in, or
                 knowingly undertakes to conceal, an act or omission
                 of such other fiduciary, knowing such act or omission
                 is a breach;
                       (2) if, by his failure to comply with section
                 1104(a)(1) of this title in the administration of his
                 specific responsibilities which give rise to his
                 status as a fiduciary, he has enabled such other
                 fiduciary to commit a breach; or
                       (3) if he has knowledge of a breach by such
                 other fiduciary, unless he makes reasonable efforts
                 under the circumstances to remedy the breach.

     4
           29 U.S.C. § 1106(a)(1)(D) (2012) states in relevant part:

                 A fiduciary with respect to a plan shall not cause
           the plan to engage in a transaction, if he knows or should
           know that such transaction constitutes a direct or
           indirect-- . . .
                       (D) transfer to, or use by or for the benefit
                 of a party in interest, of any assets of the plan
                 . . . .




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           After a three-day bench trial, the federal district

court entered its “Findings of Fact and Conclusions of Law.”

The federal district court first concluded that the MAF is an

employee benefit plan governed by ERISA pursuant to 29 U.S.C.

§ 1002(1),5 and that it had jurisdiction pursuant to 28 U.S.C.

§ 1331, which grants the district courts of the United States

original jurisdiction of all civil actions arising under the

Constitution, laws, or treaties of the United States.             DeCosta,

2008 WL 1815716, at *6-7.

           Second, focusing on Rodrigues’ activities rather than

his title as UPW’s State Director, the court found that the

evidence was “sufficient to establish by far more than a

preponderance of the evidence that [Rodrigues] exercised

discretionary authority and control over the management of the

[MAF’s] assets” in making the loans to Best Rescue.            Id. at *9.
     5
           Pursuant to 29 U.S.C. § 1002(1) (2012):

                 The terms “employee welfare benefit plan” and
           “welfare plan” mean any plan, fund, or program which was
           heretofore or is hereafter established or maintained by an
           employer or by an employee organization, or by both, to the
           extent that such plan, fund, or program was established or
           is maintained for the purpose of providing for its
           participants or their beneficiaries, through the purchase
           of insurance or otherwise, (A) medical, surgical, or
           hospital care or benefits, or benefits in the event of
           sickness, accident, disability, death or unemployment, or
           vacation benefits, apprenticeship or other training
           programs, or day care centers, scholarship funds, or
           prepaid legal services, or (B) any benefit described in
           section 186(c) of this title (other than pensions on
           retirement or death, and insurance to provide such
           pensions).


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The court additionally concluded that pursuant to 29 U.S.C.

§ 1104, plaintiffs had demonstrated by a preponderance of the

evidence that Rodrigues “clearly breached his fiduciary duties”

with respect to five of the six loans made to Best Rescue.              Id.

at *11.    Specifically, the federal district court concluded that

a prudent fiduciary would have done more before authorizing and

recommending further investments with Best Rescue after

Rodrigues’ first loan to the company.         Id. at *12.     The court

also concluded that the actions of the MAF Board in relation to

the failed investments did not make Rodrigues any less liable

for his own actions.       Id.   The court held that Rodrigues was

liable under ERISA for making imprudent investments and that he

was liable for five of the six failed loans, which totaled

$850,000.    Id. at *14.     The Ninth Circuit Court of Appeals

subsequently affirmed the federal district court’s judgment.              De

Costa, 334 F. App’x at 810.

C.   Hawaii State Court Proceedings

      1.   Circuit Court Proceedings

            On December 9, 2008, Rodrigues filed a “Complaint for

Indemnity” in the circuit court, alleging that his liability to

the MAF “arose solely from acts and/or omissions” committed by

Rodrigues “in his capacity as agent of Defendant UPW and/or were

authorized and/or ratified by the trustees of the [MAF] and/or


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Defendant UPW.”       Rodrigues sought indemnification from UPW in

the amount of $850,000 plus attorneys’ fees and costs incurred

in defending the ERISA breach of fiduciary duties action.             UPW

filed an answer asserting multiple defenses, including ERISA

preemption.

              Rodrigues moved the circuit court for partial summary

judgment in his favor as to the duty/liability of UPW to

indemnify Rodrigues for the loss he suffered in the federal

district court proceedings.         Rodrigues argued that the

underlying actions for which he was held liable under ERISA were

within the scope of his performance of duties assigned to him by

UPW.       Rodrigues thus asserted that UPW was vicariously liable to

the MAF for Rodrigues’ actions, and also directly liable for its

negligence in assigning him as the MAF’s administrator.

Accordingly, Rodrigues contended that UPW had a duty to

indemnify him for the federal district court judgment.

              In opposition, UPW argued that Rodrigues had no right

of indemnity under ERISA and that ERISA preempted any alleged

state law indemnity claim.         The circuit court agreed with UPW;

it concluded that Rodrigues’ indemnity claim was preempted by

ERISA and entered summary judgment in favor of UPW.6

       2.    ICA Proceedings

       6
              The Honorable Karl K. Sakamoto presided.


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           On appeal to the ICA, Rodrigues argued that his action

was not preempted under the doctrine of implied conflict

preemption because his indemnity claim did not “‘duplicate[],

supplement[], or supplant[]’ remedies provided in ERISA’s civil

enforcement scheme.”      He also asserted that his action was not

expressly preempted by ERISA’s preemption clause.            Rodrigues

contended that his indemnification claim arose solely from his

employment relationship with UPW, which was not an ERISA party

in the underlying federal court action.          Rodrigues thus argued

that his indemnity claim was not preempted by ERISA’s express

preemption clause because,

           (1) his claims [were] entirely independent of any ERISA
           duties or obligations; (2) adjudication of these claims
           [would] not involve the plan’s administration and the
           benefits provided; and (3) adjudication of these claims
           [would] not encroach on any ERISA relationship or have any
           impact on any ERISA plan or party.

(Citation omitted).

           UPW argued that (1) under ERISA there is no right of

indemnity for a breaching fiduciary; (2) Rodrigues’ state law

indemnity claim was preempted by ERISA; (3) Rodrigues’ indemnity

claim was premature because he had not suffered a loss; and (4)

Rodrigues was an active wrongdoer, and accordingly, Rodrigues

should “bear the loss.”

           The ICA held that ERISA did not preempt Rodrigues’

indemnity claim; it reasoned that because Rodrigues’ “liability


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to the plan for breach of his fiduciary duties had already been

established,” the resolution of his indemnity claims against UPW

“[did] not raise questions involving the [MAF’s] administration

and the benefits provided.”        Rodrigues, 2014 WL 983024, at *8.

            The ICA also explained that Rodrigues’ indemnity claim

did not supplement ERISA’s civil enforcement scheme because his

claim was an independent cause of action: “UPW’s alleged

obligation to indemnify derives not from the plan’s ‘particular

rights and obligations,’ but rather, from the alleged duties UPW

owed to Rodrigues by virtue of UPW designating Rodrigues as its

agent to serve as a plan fiduciary.”         Id. at *9.

            Recognizing, however, that the circuit court did not

address whether Rodrigues’ negligence was a bar to his indemnity

claim because it found the preemption issue dispositive, the ICA

entered summary judgment on the alternative ground that his own

negligence barred Rodrigues’ claim for indemnification.7             Id. at

*10-12.

                        III.   Standards of Review

A.   Motion for Summary Judgment

            “We review [a] circuit court’s award of summary


      7
             The ICA concluded that it could “affirm a judgment of the lower
court on any ground in the record that supports affirmance.” Id. at *10
(quoting Canalez v. Bob’s Appliance Serv. Ctr., Inc., 89 Hawaii 292, 301, 972
P.2d 295, 304 (1999)) (internal quotation mark omitted).


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judgment de novo under the same standard applied by the circuit

court.”     Garcia v. Kaiser Found. Hosps., 90 Hawaii 425, 429, 978

P.2d 863, 867 (1999) (alteration in original) (citing Amfac,

Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 104, 839 P.2d

10, 22 (1992)).     “Summary judgment is appropriate if the

pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter of law.”

Amfac, 74 Haw. at 104, 839 P.2d at 22 (citation omitted)

(internal quotation marks omitted).

B.   ERISA preemption

             Questions of federal preemption under ERISA are

questions of law reviewable de novo under the right/wrong

standard.     Ditto v. McCurdy, 90 Hawaii 345, 351, 978 P.2d 783,

789 (1999).

                             IV.   Discussion

A.   ERISA

             ERISA is “the product of a decade of congressional

study of the Nation’s private employee benefit system.”             Mertens

v. Hewitt Assocs., 508 U.S. 248, 251 (1993) (citing Nachman

Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 361 (1980)).

It “is a comprehensive statute designed to promote the interests

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of employees and their beneficiaries in employee benefit plans.”

Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90 (1983).             Employee

benefit plans covered under ERISA include pension plans as well

as welfare plans such as the MAF, which provides hospitalization

and related benefits for participating UPW employees and

members, and their dependents.        See Massachusetts v. Morash, 490

U.S. 107, 113 (1989).

           ERISA imposes various uniform standards for both

pension and welfare plans.       Ingersoll-Rand Co. v. McClendon, 498

U.S. 133, 137 (1990).      As part of this regulatory system,

Congress included “one of the broadest preemption clauses ever

enacted . . . .”     Evans v. Safeco Life Ins. Co., 916 F.2d 1437,

1439 (9th Cir. 1990).      The ERISA preemption clause, ERISA

§ 514(a), codified as 29 U.S.C. § 1144(a), states that ERISA

“shall supersede any and all State laws insofar as they may now

or hereafter relate to any employee benefit plan . . . .”             29

U.S.C. § 1144(a) (2012).       “‘[S]tate laws’ include claims ‘based

upon common law of general application’” such as Rodrigues’

indemnity claim.     See Garcia, 90 Hawaii at 431, 978 P.2d at 869

(quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 62

(1987)).

             Questions involving this clause are recurrent in

state and federal courts.       The number of ERISA preemption cases


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before the United States Supreme Court reflects the

“comprehensive nature of the statute, the centrality of pension

and welfare plans in the national economy, and their importance

to the financial security of the Nation’s work force.”             Boggs v.

Boggs, 520 U.S. 833, 839 (1997); see also California Div. of

Labor Standards Enforcement v. Dillingham Const., N.A. Inc., 519

U.S. 316, 334-35 (1997) (Scalia, J., concurring) (“Since ERISA

was enacted in 1974, this Court has accepted certiorari in, and

decided, no less than 14 cases to resolve conflicts in the

Courts of Appeals regarding ERISA pre-emption of various sorts

of state law.    The rate of acceptance, moreover, has not

diminished . . . .” (footnote omitted)).

           “[D]eveloping a rule to identify whether ERISA”

expressly preempts a state law based on the “relate to” language

has “bedeviled the Supreme Court” and other federal courts.              See

Dishman v. UNUM Life Ins. Co. of Am., 269 F.3d 974, 980 (9th

Cir. 2001) (citation omitted) (internal quotation marks

omitted); see also Gen. Am. Life Ins. Co. v. Castonguay, 984

F.2d 1518, 1521 (9th Cir. 1993) (“It’s far easier to make ‘I

know it when I see it’ decisions in this field than to come up

with a general rule, but we must nonetheless try.”).            Attempts

at construing the “relate to” language have yielded a number of

tests.   The Supreme Court has held that a law “relates to” an


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ERISA plan if it has a reference to or connection with such a

plan.   Dillingham, 519 U.S. at 324.        The Court has concluded

that a state law has a forbidden reference where it “acts

immediately and exclusively upon ERISA plans” and “where the

existence of ERISA plans is essential to the law’s operation.”

Id. at 325; see also District of Columbia v. Greater Washington

Bd. of Trade, 506 U.S. 125, 130 (1992) (“Section 2(c)(2) of the

[District of Columbia’s] Equity Amendment Act specifically

refers to welfare benefit plans regulated by ERISA and on that

basis alone is pre-empted.”); Mackey v. Lanier Collection Agency

& Serv., Inc., 486 U.S. 825, 828-30 (1988) (preempting a law

that specifically exempted ERISA plans from an otherwise

generally applicable garnishment provision).

           In construing the “connection with” part of the test,

however, the Court recognized that applying this term was no

more help than trying to construe the phrase “relate to” in

ERISA’s preemption clause.       New York State Conference of Blue

Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645,

656 (1995).    The Court opined: “For the same reasons that

infinite relations cannot be the measure of pre-emption, neither

can infinite connections.”       Id.    Accordingly, the Court held:

“We simply must go beyond the unhelpful text and the frustrating

difficulty of defining [the preemption clause’s] key term, and


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look instead to the objectives of the ERISA statute as a guide

to the scope of the state law that Congress understood would

survive.”    Id.

            The Court reiterated Travelers’ holding and provided

further guidance in De Buono v. NYSA-ILA Medical and Clinical

Services Fund, 520 U.S. 806, 813 (1997).          In De Buono, the Court

explained that in its “earlier ERISA pre-emption cases, it had

not been necessary to rely on the expansive character of ERISA’s

literal language in order to find pre-emption because the state

laws at issue in those cases had a clear connection with or

reference to ERISA benefit plans.”         De Buono, 520 U.S. at 813

(citation omitted) (internal quotation marks omitted).             The

Court explained, however, that “ERISA’s ‘relates to’ language

was [not] intended to modify ‘the starting presumption that

Congress does not intend to supplant state law.’”            Id. (quoting

Travelers, 514 U.S. at 654); see also John Hancock Mut. Life

Ins. Co. v. Harris Trust & Sav. Bank, 510 U.S. 86, 99 (1993)

(“[W]e discern no solid basis for believing that Congress, when

it designed ERISA, intended fundamentally to alter traditional

preemption analysis.”).

            Since then, the Court has consistently looked to the

purposes and objectives of ERISA, and applied ordinary




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preemption principles in its ERISA preemption cases.8            See, e.g.,

Aetna Health Inc. v. Davila, 542 U.S. 200, 209, 217-18 (2004)

(preempting respondents’ state tort claim seeking to rectify a

wrongful denial of benefits because it would “pose an obstacle

to the purposes and objectives of Congress” because it

“conflict[ed] with the clear congressional intent to make the

ERISA remedy exclusive” (quoting Pilot Life Ins. Co. v. Dedeaux,

481 U.S. 41, 52 (1987)) (internal quotation marks omitted));

Boggs, 520 U.S. at 841 (“We can begin, and in this case end, the

analysis by simply asking if state law conflicts with the

provisions of ERISA or operates to frustrate its objects. . . .

We need not inquire whether the statutory phrase ‘relate to’

provides further and additional support for the pre-emption

claim.”); see also Dillingham, 519 U.S. at 336 (Scalia, J.,

concurring) (“I think it accurately describes our current ERISA



     8
            Justices Scalia, Ginsburg, and Breyer have urged the court to
completely abandon the application of the “relate to” language in ERISA’s
preemption clause and instead, apply ordinary principles of preemption in
ERISA cases. In a concurring opinion joined by Justice Ginsburg, Justice
Scalia opined that the Court’s “first take” of the preemption provision was
wrong. Dillingham, 519 U.S. at 336 (Scalia, J., concurring). He explained
that the “relate to” clause of the preemption provision was meant, “not to
set forth a test for pre-emption, but rather to identify the field in which
ordinary field pre-emption applies-namely, the field of laws regulating”
employee benefit plans. Id.; see also Egelhoff v. Egelhoff, 532 U.S. 141,
153 (2001) (Breyer, J., dissenting) (noting his “fear” that “failure to
endorse” Justice Scalia’s approach in Dillingham, applying normal conflict
and field preemption principles in ERISA cases, would continue to produce an
“avalanche of litigation” as courts struggled to interpret ERISA’s preemption
clause (citation omitted) (internal quotation marks omitted)).


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jurisprudence to say that we apply ordinary field pre-emption,

and, of course, ordinary conflict pre-emption.”).

           This court has similarly endeavored to apply

traditional preemption principles in our own ERISA cases,

recognizing that state law may be expressly or impliedly

preempted by federal law.       See Garcia, 90 Hawaii at 430, 978

P.2d at 868 (“[W]e are presented with the question whether

Congress, in ERISA, expressly or impliedly intended to preempt

the state law claims asserted in Plaintiffs’ complaint.”).

           We have held that state law claims asserted by

beneficiaries for improper processing of claims for benefits

under an ERISA plan are expressly preempted by ERISA.             Id. at

432, 978 P.2d at 870.      This is so because “Congress clearly

expressed an intent” that ERISA’s civil enforcement provision

“be the exclusive vehicle for actions by ERISA-plan participants

and beneficiaries asserting improper processing of a claim for

benefits, and that varying state causes of action for claims

within the scope [of these provisions] would pose an obstacle to

the purposes and objectives of Congress.”          Pilot, 481 U.S. at

52.   Accordingly, based on “the clear expression of

congressional intent that ERISA’s civil enforcement scheme be

exclusive,” ERISA expressly preempts such state causes of

action.   Id. at 57; see also AFL Hotel & Rest. Workers Health &


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Welfare Trust Fund v. Bosque, 110 Hawaii 318, 324, 132 P.3d

1229, 1235 (2006) (“[S]tate law claims are expressly preempted

where they rely on a person’s ‘status as a beneficiary under the

[ERISA] plan and ar[i]se from the administration of benefits

under the plan.’” (alterations in original) (quoting Garcia, 90

Hawaii at 433, 978 P.2d at 871)).

           In addition to express preemption, this court has

recognized that a federal statute can impliedly preempt state

law under field or conflict preemption.          Under implied field

preemption, a federal statute preempts state law “when the scope

of a statute indicates that Congress intended federal law to

occupy a field exclusively . . . .”          Freightliner Corp. v.

Myrick, 514 U.S. 280, 287 (1995) (citing English v. Gen. Elec.

Co., 496 U.S. 72, 78-79 (1990)).          Under implied conflict

preemption, a federal statute preempts state law “when state law

is in actual conflict with federal law.”          Id.    Implied conflict

preemption has been found “where it is impossible for a private

party to comply with both state and federal requirements, or

where state law stands as an obstacle to the accomplishment and

execution of the full purposes and objectives of Congress.”              Id.

(citations omitted) (internal quotation marks omitted).

           We applied the doctrine of implied conflict preemption

in a case involving a Hawaii state statute.            In Hawaii

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Management Alliance Association v. Insurance Commissioner, we

concluded that a Hawaii statute that provided an independent

review of an insurer’s denial of benefits and provided claimants

the right to appeal that denial to the courts, allowing for a

judicial determination of the claimants entitlement to benefits,

was preempted.     106 Hawaii 21, 34-35, 100 P.3d 952, 965-66

(2004).   We explained that in cases involving ERISA plans, such

adjudication was in actual conflict with ERISA’s civil

enforcement scheme, which the Supreme Court had concluded was

intended to be exclusive.       Id.   Accordingly, we held that

ERISA’s civil enforcement scheme impliedly preempted the Hawaii

statute under the doctrine of conflict preemption.            Id. at 29-

30, 100 P.3d at 960-61.

           The instant case is distinguishable from our previous

cases because it does not involve a claim for benefits under an

ERISA plan.    Rather, the state law in the instant case is a

common law indemnification claim based on Rodrigues’ allegations

that UPW negligently supervised him in his role as an ERISA

fiduciary and thus, UPW, not he, should be held liable for his

breach of fiduciary duties under ERISA.          Congress’s intent to

preempt such claims is not explicitly stated in ERISA’s language

nor is it clear on its face that the claim “relates to” an



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employee benefit plan within the meaning of ERISA’s preemption

clause.

             Notwithstanding, we hold that Rodrigues’ state law

claim is in conflict with ERISA.          Allowing Rodrigues to proceed

with his state law claim would pose an obstacle to the purposes

and objectives of Congress in enacting ERISA.           See Boggs, 520

U.S. at 844 (“Conventional conflict pre-emption principles

require pre-emption . . . where state law stands as an obstacle

to the accomplishment and execution of the full purposes and

objectives of Congress.” (quoting Gade v. Nat’l Solid Wastes

Mgmt. Ass’n, 505 U.S. 88, 98 (1992)) (internal quotation mark

omitted)).    Accordingly, Rodrigues’ state law claim cannot

survive under the doctrine of implied conflict preemption.

B.   Rodrigues’ State Law Claim is Preempted

             ERISA’s central focus is on the administrative

integrity of benefit plans.       Fort Halifax Packing Co., Inc. v.

Coyne, 482 U.S. 1, 18 (1987).        “In enacting ERISA, Congress’[s]

primary concern was with the mismanagement of funds accumulated

to finance employee benefits and the failure to pay employees

benefits from accumulated funds.”          Morash, 490 U.S. at 115.

“Thus, Congress enacted ERISA . . . to protect plan participants

and beneficiaries from abuses and mismanagement in the

administration of employee pension and benefit plans.”             Hawaii


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Laborers’ Trust Funds v. Maui Prince Hotel, 81 Hawaii 487, 493,

918 P.2d 1143, 1149 (1996).       To this end, Congress “established

extensive reporting, disclosure, and fiduciary duty requirements

to insure against the possibility that the employee’s

expectation of the benefit would be defeated through poor

management by the plan administrator.”          Morash, 490 U.S. at 115;

see also 29 U.S.C. § 1001 (2012) (declaring the policies of

ERISA).

            The role of the ERISA fiduciary is critical to the

administrative integrity of an employee benefit plan.             Congress

recognized that “without standards by which a participant can

measure the fiduciary’s conduct, [a participant] is not equipped

to safeguard either his [or her] own rights or the plan assets.”

Bird v. Shearson Lehman/Am. Express, Inc., 926 F.2d 116, 123 (2d

Cir. 1991) (citation omitted).        ERISA thus specifies stringent

standards of conduct and responsibility on fiduciaries of

employee benefit plans to prevent potential fiduciary abuse.

Pilot Life, 481 U.S. at 44; Coyne, 482 U.S. at 15.

            The duties imposed by ERISA are “the highest known to

the law.”    Johnson v. Couturier, 572 F.3d 1067, 1082 (9th Cir.

2009) (quoting Howard v. Shay, 100 F.3d 1484, 1488 (9th Cir.

1996)) (internal quotation marks omitted).          Congress chose to

hold plan fiduciaries to this high standard “to promote the


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interests of employees and their beneficiaries in employee

benefit plans[.]”     Id. (quoting Shaw, 463 U.S. at 90) (internal

quotation marks omitted).       An ERISA fiduciary must “discharge

his duties . . . solely in the interest of the participants and

beneficiaries” of the plan, and “for the exclusive purpose[s] of

. . . providing benefits to plan participants and their

beneficiaries[,]” and “defraying reasonable expenses of

administering the plan[.]”       29 U.S.C. § 1104(a)(1)(A)(i)-(ii).

           In further support of these rigorous fiduciary

responsibilities, ERISA holds its fiduciaries personally liable

for their breaches.      Pursuant to 29 U.S.C. § 1109(a), a

fiduciary is personally liable for (1) “damages (to make good to

[the] plan any losses to the plan resulting from each such

breach)”; (2) “restitution (to restore to [the] plan any profits

of such fiduciary which have been made through use of assets of

the plan by the fiduciary)”; and (3) “such other equitable or

remedial relief as the court may deem appropriate, including

removal of the fiduciary.”       Mertens, 508 U.S. at 252

(alterations in original) (quoting 29 U.S.C. § 1109(a) (1988))

(internal quotation marks omitted).         ERISA forbids agreements

that relieve fiduciaries from such liability.           Under 29 U.S.C.

§ 1110(a), “any provision in an agreement or instrument which

purports to relieve a fiduciary from responsibility or liability


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for any responsibility, obligation, or duty . . . [is] void as

against public policy.”      29 U.S.C. § 1110(a) (2012).

           In this case, Rodrigues portrays himself not as a

fiduciary, but as a mere agent performing duties at the

direction of his principal, UPW.          Rodrigues argues that UPW

assigned him to invest the MAF funds, was aware of the MAF

investments in Best Rescue, and acquiesced to them; thus UPW,

not he, should be held liable for the $850,000 judgment imposed

by the federal district court.        We disagree.

           ERISA’s regulatory standards and fiduciary provisions

were deliberately crafted to safeguard employees and “prevent

abuses of the special responsibilities borne by those dealing

with employee benefit plans” including “self-dealing, imprudent

investing, and misappropriation of plan funds.”           Coyne, 482 U.S.

at 15 (citation omitted) (internal quotation marks omitted).

Rodrigues was more than simply UPW’s agent and employee; he was

the MAF’s administrator and an ERISA fiduciary.           The federal

district court concluded that the evidence was “sufficient to

establish by far more than a preponderance of the evidence that

[Rodrigues] exercised discretionary authority and control over

the management of the [MAF’s] assets” in making the loans to

Best Rescue.    DeCosta, 2008 WL 1815716, at *9.         Accordingly,

Rodrigues’ actions with respect to the loans must be evaluated


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in his capacity as an ERISA fiduciary, not as an agent and

employee with no discretion or control over the MAF’s assets.

           We also emphasize that contributions to the MAF are

made by UPW members, UPW employees, and their dependents;

contributions are not made by their employers.           Thus, Rodrigues

seeks indemnity, essentially a dollar for dollar reimbursement

from UPW, for the liability he incurred for his mismanagement of

the MAF funds, not simply from his employer, UPW, but from the

very participants to whom he breached his duties.            Under these

circumstances, permitting Rodrigues’ state indemnity claim would

undermine ERISA’s goal of protecting plan participants and

beneficiaries from abuses and mismanagement in the

administration of employee benefit plans.          “In the face of this

direct clash between state law and the provisions and objectives

of ERISA, the state law cannot stand.”          Boggs, 520 U.S. at 844.

We “are not free to change ERISA’s structure and balance” to

permit Rodrigues to escape any liability for his imprudent

investing.    Id.   ERISA requires fiduciaries to be personally

liable for damages to the plan resulting from a fiduciary

breach.   Accordingly, we hold Rodrigues’ claim is preempted.

                              V.   Conclusion

           For the foregoing reasons, we hold that the circuit

court correctly concluded that Rodrigues’ indemnity claim was


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preempted by ERISA.      Accordingly, we affirm the ICA’s April 15,

2014 judgment on appeal, entered pursuant to its March 13, 2014

opinion, on the grounds stated in this opinion.



Eric A. Seitz and                  /s/ Mark E. Recktenwald
Della A. Belatti,
for petitioner                     /s/ Paula A. Nakayama

James E.T. Koshiba and             /s/ Sabrina S. McKenna
Charles A. Price
for respondent                     /s/ Richard W. Pollack

                                   /s/ Michael D. Wilson




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