Housman v. Albright

In Housman v. Albright, 368 Ill. App. 3d 214, 221, 857 N.E.2d 724, 731, 306 Ill. Dec. 325 (2006), the plaintiffs, including Albert Johnson, Jr., filed a shareholders' derivative suit against the board of directors of Waterfront, including Geoffrey Smith. The plaintiffs alleged that Smith had engaged in a scheme of systematic corporate looting and self-dealing. Housman, 368 Ill. App. 3d at 217, 857 N.E.2d at 728. Housman acknowledged that the broad language of the exemption provision expressed "Congress's intent to establish an area of exclusive federal concern." Housman, 368 Ill. App. 3d at 221, 857 N.E.2d at 731. Housman stated the criteria for preemption: "Preemption must have its limits because otherwise it would effectively drag into federal court 'many ordinary state common law causes of action that rightfully fall within the purview of adjudication by state courts, as well as state law claims that implicate federal law as ancillary issues or defenses that state courts are suitably equipped and concurrently empowered to resolve-litigation that need not add its incremental burden to the federal docket.' Atlantis Health Plan, Inc. v. Local 713, 258 F. Supp. 2d 284, 291 (S.D.N.Y. 2003). In the instant case, the defendants bear the burden of overcoming the presumption that Congress, in enacting ERISA, did not intend to supplant state law, especially traditional areas under state control, such as corporate law. See In re World Trade Center Disaster Site Litigation, 270 F. Supp. 2d 357, 367 (S.D.N.Y. 2003), affd on other grounds, 414 F.3d 352 (2d Cir. 2005). As long as a state law '"'does not affect the structure, the administration, or the type of benefits provided by an ERISA plan, the mere fact that the law has some economic impact on the plan does not require that the law be invalidated.'"' Airparts Co. v. Custom Benefit Services of Austin, Inc., 28 F.3d 1062, 1065 (10th Cir. 1994), quoting Hospice of Metro Denver, Inc. v. Group Health Insurance of Oklahoma, Inc., 944 F.2d 752, 754 (10th Cir. 1991), quoting Rebaldo v. Cuomo, 749 F.2d 133, 139 (2d Cir. 1984)." Housman, 368 Ill. App. 3d at 221-22, 857 N.E.2d at 731-32.