Rutledge, Att'y Gen. of AK v. Pharmaceutical Care Management Ass'n

Summarized by:

  • Court: United States Supreme Court
  • Area(s) of Law: Preemption
  • Date Filed: December 10, 2020
  • Case #: 18-540
  • Judge(s)/Court Below: SOTOMAYOR, J., delivered the opinion of the Court, in which all other Members joined, except BARRETT, J., who took no part in the consideration or decision of the case. THOMAS, J., filed a concurring opinion.
  • Full Text Opinion

The purpose of the Employee Retirement Income Security Act of 1974 “to make the benefits promised by an employer more secure by mandating certain oversight systems and other standard procedures.” Gobeille v. Liberty Mut. Ins. Co., 577 U. S. 312, 320-321 (2016).

Act 900 mandated all Arkansas “pharmacy benefit managers,” i.e. liaisons between drug-providers and plan-providers, to reimburse drugstores for their “acquisition cost.” Respondent brought an action to challenge Act 900 and argued the law was preempted by the “Employee Retirement Income Security Act of 1974” (ERISA). The District Court granted summary judgement to Respondent, and the Eighth Circuit Court of Appeals affirmed. ERISA preempts “all State laws… [that] relate to any employee benefit plan.” 29 U.S.C. 1144(a). The relevant inquiry is whether the law obstructs employee benefits that ERISA sought to protect. On appeal to the U.S. Supreme Court, Petitioner argued that Act 900 was a mere cost regulation and not within the scope of ERISA. Respondent argued that Act 900 is more than cost regulation because its application would directly affect employment matters. Even if Act 900 might affect employment, the Court found that it does not force employers to “adopt any particular scheme of substantive coverage.” Thus, the Court held that Act 900 was not within the kind of state laws that ERISA intended to preempt. Reversed.  

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