Outrage dep’t: ERISA pre-emption

If your employer cheats your widow out of $426,000 she should have been able to collect on your life insurance, the courts won’t do a thing about it.

A company cheats a widow out of $426,000 by switching insurance companies and never listing her husband, then an employee out of work because he was dying of cancer, with the new life insurance company. The widow sues. The suit is dismissed because it’s barred by ERISA, the law that’s supposed to protect workers from being cheated out of their pensions. The widow appeals, the Bush Administration asks the Supreme Court to grant cert., and the Supremes say “no,” although one of the Appeals Court judges wrote that “the facts scream out for a remedy.”

The courts have been doing this since 1993 (apparently with the liberal justices on the losing side), and somehow the Congress never gets around to changing the law.

If I were writing speeches for Barack Obama, this case would be part of a rotating set of “How the little guy gets the shaft from the system” examples. I’d include at least one of them in every delivery of the stump speech, with an exposition of how the screw job works and how the current Washington game keeps it in place. We need the liberal version of the old Reagan “welfare queen” story: with the opposite political spin, and using real rather than made-up facts, but with the same goal of creating outraged anger in the audience.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com