New Administration Backs Out of Lawsuit Against CalSavers

Attorneys have notified the 9th U.S. Circuit Court of Appeals that, “after the change in administration,” the Department of Labor (DOL) no longer wishes to participate as an amicus curiae in the case arguing that California’s state-run automatic individual retirement account (IRA) program is pre-empted by the Employee Retirement Income Security Act (ERISA).

The complaint was originally filed in 2018 by the Howard Jarvis Taxpayers Association and alleged the act that created the California Secure Choice program, now known as CalSavers, “violates the Supremacy Clause of the United States Constitution because it is expressly pre-empted by the Employee Retirement Income Security Act of 1974.” The case was dismissed last March with the court finding no impermissible reference to or connection with ERISA plans in the statute.

The Howard Jarvis Taxpayers Association filed an appeal of the case, and, in June, the DOL under former President Donald Trump filed a brief of amicus curiae in support of the association, requesting a reversal of the District Court’s findings. The DOL argued at that time that the law establishing CalSavers is pre-empted under the legal doctrine that state law relates to an ERISA plan if it has a connection with or reference to such plans. The agency said this is because it both governs a central matter of plan administration and interferes with nationally uniform plan administration—by subjecting multi-state employers to a patchwork of state laws that directly regulate how employers must structure their program or plan in providing retirement benefits.

The new administration says in its filing that the DOL not only no longer wants to participate in the case but that it “does not support either side.”