The principal issue presented by this case is whether the Federal Employee Retirement Security Act (ERISA), 29 U.S.C. §§ 1001-1381 (1976), precludes criminal prosecution under N.J.S.A. 2A:170-90.2, for the failure of the employer to make contributions to an employee pension plan. At oral argument an issue arose whether the Complaint charged conduct involving the pension fund alone or included activity pertaining to the Welfare Fund. Although this issue raised at oral argument will be discussed it has no effect on the impact or import of this Opinion. The principal issue will be analyzed in two steps: first, whether N.J.S.A. 2A:170-90.2 "relate(s) to" employee benefit plans within the meaning of ERISA § 514, 29 U.S.C. § 1144 and second, if so, whether it is preempted by ERISA.
In this case the State is a private litigant seeking to collect monies allegedly owed by a corporation by forcing payment of the alleged debt from selected corporate officers. The Local 478 Trucking and Allied Industries Pension Fund ("Local 478 Fund") and Local 478, International Brotherhood of Teamsters ("Union") initiated this criminal action pursuant to N.J.S.A. 2:A170-90.2 against four officers of the bankrupt Branch Motor
Express Company ("Branch") to collect delinquent pension contributions. It is alleged that Branch failed to pay monies owed to the Local 478 Fund.
This action was instituted in the Township of Union Municipal Court. John A. Craner, counsel for the complainants, was designated by the Union Municipal Court as the acting prosecutor for the purpose of representing the State in this action. Subsequently, counsel for defendants made a motion before the Union Municipal Court to dismiss the Complaint alleging, inter alia, that the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (ERISA) preempted N.J.S.A. 2A:170-90.2 The Municipal Court granted the motion and dismissed the Complaint in its entirety.
An appeal of the Municipal Court's Order of Dismissal was filed by the State. Defendants moved to dismiss the appeal on the ground that it was not timely filed. The motion was granted by the Honorable Edward McGrath, J.S.C. The State then appealed Judge McGrath's Order to the Appellate Division. The Appellate Division granted the appeal and the State's appeal de novo was reinstated in the Superior Court. 207 N.J. Super. 53. The matter, following the remand, is presently before this Court on the defendants' motion to dismiss the Complaint on the grounds that the State statute is preempted by ERISA, inter alia.
Before discussing the preemption issue, we must decide what is the exact charge before this Court, and depending upon that finding, whether the Complaint can now be amended. The Municipal Court Complaint names as complainant "Trustees of Joint Welfare Fund of Employers of Local 478, IBT" and alleges that defendants failed to make contributions that were required to the "Pension Fund." No Complaint refers to contributions to Welfare Benefit Plans. The State, through appointed private counsel, claims that the required contributions were neither made to the Pension Fund nor the Welfare Fund. The State's counsel takes the position in his letter brief dated May
22, 1986 that "no one paid particular attention to the specific allegation in the Complaints until most recently", stating that the discrepancy was a mere clerical or administrative error of the Clerk of the Municipal Court.
R.7:10-2 pertains to the Amendment of Municipal Court Complaints. Under the best of circumstances it does not permit an amendment if it "charges a different substantive offense (other than a lesser included defense)." It is unclear from the Rule or the Comments what is meant by a different substantive offense, but Words & Phrases and Black's Law Dictionary, 5 Ed., both define a "substantive offense" as follows: "A substantive offense is one of itself and not dependent upon another." Clearly, in this case both failures to make contributions to the pension and/or welfare funds are separate maintainable causes. A defendant could be found guilty of one and not the other, so they are not dependent upon each other and are "different." Therefore, the suggested amendment is barred by R. 7:10-2. Any new charge against defendants is also barred by N.J.S.A. 2C:1-6(b)(2).
In deciding whether a federal law preempts a state statute, the Court must determine Congress' intent in enacting the federal statute at issue. In ERISA, Congress made its intent known in what has been called "the most sweeping federal preemption statute ever enacted by Congress." California Hospital Assn. v. Henning, 569 F. Supp. 1544, 1546 (D.C.Cal.1983). The pertinent part of 29 U.S.C. § 1144(a) reads:
Except as provided in sub-section (b) of this section, the provisions of this sub-chapter . . . 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.
When the House of Representatives and Senate initially passed ERISA, the preemption provisions contained in the House and Senate versions differed substantially from each other and from the present statute. The House version limited preemption to enumerated areas expressly covered by the bill. H.R. 2, 93d Cong., 2d Sess. § 514(a), reprinted in 3 Legislative
History of ERISA prepared by the sub-committee on Labor of the Senate Committee on Labor and Public Welfare (1976) ("Legislative History") 4057-58, passed by House at 120 Cong. Rec. 4782 (Feb. 28, 1974), reprinted in 3 Legislative History 3896. The Senate version preempted this act on the "Welfare and Pension Plans Disclosure Act. . . ." H.R. 2, 93d Cong., 2d Sess. § 699(a), reprinted in 3 Legislative History 3820, passed by Senate at 120 Cong.Rec. 5011 (Mar. 4, 1974), reprinted in 3 Legislative History 3598.
Senator Javits, the then-ranking minority member of the Senate Committee on Labor and Public Welfare, explained the change from the original limited preemption to the broad provision enacted by the Legislature:
Both House and Senate bills provided for preemption of State law, but . . . defined the perimeters of preemption in relation to the areas regulated by the bill. Such a formulation raised the possibility of endless litigation over the validity of State action that might impinge on Federal regulation, as well as opening the door to multiple and potentially conflicting State laws hastily contrived to deal with some particular aspect of private welfare or pension benefit plans not ...