Hampers v. W.R. Grace & Co.

Opinion

USCA1 Opinion

                 United States Court of Appeals

                     For the First Circuit


No. 99-1362



                  CONSTANTINE L. HAMPERS, M.D.,



                      Plaintiff, Appellant,



                                v.



                     W.R. GRACE & CO., INC., 

                 W.R. GRACE & CO.-CONN., INC.,

                  NATIONAL MEDICAL CARE, INC.,

         FRESENIUS NATIONAL MEDICAL CARE HOLDINGS, INC.,



                      Defendants, Appellees.


APPEALS FROM THE UNITED STATES DISTRICT COURT



                FOR THE DISTRICT OF MASSACHUSETTS

                                

   [Hon. W. Arthur Garrity, Jr., Senior U.S. District Judge]


Before

                                

                     Stahl, Circuit Judge,

                   Cyr, Senior Circuit Judge,

                   and Lipez, Circuit Judge. 


D. Lloyd Macdonald, with whom Andrew C. Glass and Kirkpatrick

& Lockhart, LLP were on brief for appellant.



     Michael R. Pontrelli, with whom Thomas Elkind, Lawrence M.

Kraus, and Epstein, Becker and Green, P.C. were on brief for

appellees.


January 28, 2000


LIPEZ, Circuit Judge.  This appeal requires us to decide

whether the Employee Retirement Income Security Act of 1974

("ERISA") as amended, 29 U.S.C.  1001 et. seq., preempts a common

law cause of action for lump sum contract damages where the alleged

breach involves the failure of a former employer to enroll the

plaintiff in an ERISA-regulated employee pension benefit plan.  The

plaintiff, Dr. Constantine Hampers, demanded a jury trial on his

common law breach of contract claims against defendants, W.R. Grace

and Company, W.R. Grace and Company-Connecticut, (collectively,

"Grace"), National Medical Care, Inc. ("NMC"), and Fresenius

National Medical Care Holdings, Inc. ("Fresenius").  The district

court rejected his demand, finding that ERISA preempted Hampers's

state law claims.  On appeal, Hampers argues that, with respect to

defendant Grace, the trial court erred in finding his claim

preempted.  For the reasons stated below, we affirm.  



                         I. BACKGROUND

  In 1968, as an associate professor at the Harvard Medical

School and a nephrologist specializing in end-stage renal disease,

Hampers co-founded NMC, a company that provides dialysis treatment

to patients through private clinics.  In a series of transactions

between 1984 and 1989, Grace purchased a 100 percent equity

interest in NMC, and began operating it as a wholly-owned

subsidiary.  In 1989, Hampers negotiated an employment agreement

that, among other things, provided for his participation in the

National Medical Care, Inc., Retirement Plan (the "NMC qualified

plan").

  In 1990, J.P. Bolduc became president and chief operating

officer of Grace, and he invited Hampers to become an executive

vice president of Grace and director of its health care group,

which included NMC.  On February 22, 1991, Bolduc sent a letter to

Hampers proposing terms for a new employment agreement with Grace

that was to include membership in the W.R. Grace & Co. Retirement

Plan for Salaried Employees (the "Grace qualified plan") and the

W.R. Grace & Co. Supplemental Executive Retirement Plan (the "Grace

SERP").  This agreement provided Hampers with more benefits than

he was previously entitled to under the NMC qualified plan because

at that time NMC did not have a supplemental executive retirement

plan (SERP) of its own.

  Hampers and Bolduc decided that the February 22 letter

would be the basis of their agreement, and they turned the drafting

over to their attorneys.  Before the agreement was executed,

however, Grace identified a problem with the proposed benefit

scheme: Hampers's participation in the Grace qualified plan could

jeopardize the plan's tax-preferred status.  Accordingly, Grace's

lawyers redrafted the agreement, providing Hampers with a cash

benefit equal to what they estimated he would have received under

the Grace qualified plan and Grace SERP. 



  Although these changes were acceptable to Hampers, 

Grace's Salary, Incentive Compensation and Employee Benefits

Committee found the terms too rich and refused to approve them. 

Instead, the compensation committee, and ultimately Grace's board

of directors, approved a modified version of the agreement which

capped Hampers's retirement benefits at $300,000 per year.  Hampers

reluctantly accepted the modified terms, and Grace's lawyers

reduced them to writing, providing that Hampers's pension 

    shall be equal to the amount by which (a) the

  lesser of (i) three times the actual pension

  benefit payable to him under NMC's retirement

  plan (beginning in the year in which he

  terminates employment with Grace) or (ii)

  $300,000 exceeds (b) the amount of the actual

  pension benefit payable to him under NMC's

  retirement plan at that time.  



In July 1991, Hampers and Bolduc executed the agreement (the "1991

Agreement").

  Four years later, NMC's earnings had skyrocketed, and NMC

employees demanded a richer benefits package.  In response, Grace's

board created in November 1995 the "National Medical Care, Inc.

Supplemental Executive Retirement Plan" (the "NMC SERP").  In

1996, Grace transferred ownership of NMC to Fresenius.  On June 14,

1996, Hampers retired.  Upon retirement,  Hampers inquired about

his retirement benefits.  He learned from Grace that he was not a

participant in the NMC SERP.  He also learned that if he had been

a participant in the NMC SERP, his aggregate retirement annuity

(from the combined NMC qualified plan and NMC SERP) would have

totaled more than $500,000.  On January 2, 1997, Hampers filed the

present suit, asserting that he was wrongly denied participation in

the NMC SERP.    

  In his complaint, Hampers contended that "when a SERP for

NMC senior executives . . . was created in or about November 15,

1995, Grace caused Dr. Hampers to be excluded from the NMC SERP,

and NMC so excluded Dr. Hampers."  According to Hampers, this

exclusion was a breach of the 1991 Agreement because under that

agreement he was "entitled to the full pension benefits of the NMC

retirement plan as it existed on the date of his retirement,

specifically including such benefits under the NMC qualified plan

and the NMC SERP."  In his view, the reference in the 1991

Agreement to "NMC's retirement plan" entitled him to participate,

not only in the NMC qualified plan, which existed at the time of

contracting, but also in any additional retirement benefits that

Grace might establish for NMC in the future.  

  In a count of the complaint titled "ERISA: The NMC SERP,"

Hampers asserted that the "NMC SERP is an 'employee benefits plan'

under ERISA," and Grace "exercised and exercise[s] discretion and

authority or control respecting the management, disposition and

administration of the NMC SERP, including but not limited to, the

discretion of who is to be included for participation in the NMC

SERP."  Thus, Hampers contended, "[b]y virtue of the terms of the

1991 Agreement," Grace had a "duty to include Dr. Hampers as a

participant in the NMC SERP," and "breached the duty."  

  Hampers sought a declaration that he is a participant in

the NMC SERP and an order directing his enrollment in the NMC SERP

with annuity disbursements adjusted to reflect such participation. 

Hampers also requested "damages for the loss caused by [the

defendants'] illegal conduct, including interest, costs and

attorneys [sic] fees pursuant to 29 U.S.C.  1132(g) [ERISA 

502(g)] and other applicable provisions of law."  Finally, Hampers

demanded a jury trial on all matters triable before a jury.

  The defendants moved for summary judgment on the grounds

that the 1991 Agreement contained no promise of participation in

any future NMC SERP.  In opposition to the motion, Hampers argued

that the term "NMC retirement plan" in the 1991 Agreement could not

be construed to leave out future participation in the NMC SERP, as

"[b]y its very terms, the NMC SERP is inextricably linked to and

dependent on the Qualified Plan."  Indeed, he argued, eligibility

for the NMC SERP depends on a formula that includes benefit accrual

under the NMC qualified plan.  As the only purpose of the SERP is

to confer enhanced benefits on highly compensated executives

without contravening the limits on qualified plans set by the tax

code, Hampers contended that the two plans must be construed

together to comprise one seamless retirement package.  In the end,

the district court denied summary judgment, finding that there was

"more than one reasonable construction of the term 'NMC retirement

plan.'" 

  The defendants then moved to strike Hampers's demand for

a jury trial on the grounds that the NMC SERP was an ERISA plan and

that ERISA preempted Hampers's state law cause of action. 

Characterizing the issue as a "close question," the district court

granted the defendants' motion, ruling that ERISA preempted

Hampers's state law contract claims.

  The court then conducted a ten day bench trial at which

the defendants disputed Hampers's reading of the 1991 Agreement,

arguing that the term "NMC retirement plan" referred to the NMC

qualified plan, the plan that existed at the time of contracting,

and did not promise inclusion in a future NMC SERP as Hampers

contended.  At the conclusion of the trial, the district court,

invoking principles of New York state contract law, found no

evidence that the parties intended Hampers's retirement benefits to

include benefits under the NMC SERP, and entered a judgment in

favor of the defendants.  On appeal, Hampers does not contest the

district court's application of contract law; rather, he argues

that the trial court erred in denying his demand for a jury trial

on his claim for lump sum contract damages against defendant Grace. 

Because the district court's denial of Hampers's request for a jury

trial resulted from its legal ruling that his claim was preempted

by ERISA, we review the trial court's decision de novo.  See Golas

v. Homeview Inc. 106 F.3d 1, 4 (1st Cir. 1997) (Bownes, J.,

concurring); Carlo v. Reed Rolled Thread Die Co., 49 F.3d 790, 792-

93 (1st Cir. 1995). 



                      II. ERISA PREEMPTION

A.  General Principles

  As noted, this case requires us to decide whether ERISA's

preemption clause applies to Hampers's state law cause of action. 

That preemption clause, section 514(a), 29 U.S.C.  1144(a),

provides:

    Except as provided in subsection (b) of this

  section, the provisions of this subchapter . . 

  . shall supersede any and all State laws

  insofar as they may now or hereafter relate to

  any employee benefit plan . . . .



(emphasis added).  "The term 'State law' includes all laws,

decisions, rules, regulations, or other State action having the

effect of law, of any State."  ERISA  514(c)(1), 29 U.S.C. 

1144(c)(1).  Discerning the meaning of  514(a) requires us to

construe the language of a congressional statute.  Therefore,

"[t]he question whether a certain state action is pre-empted by

federal law is one of congressional intent." Ingersoll-Rand Co. v.

McClendon, 498 U.S. 133, 137-38 (1990) (internal quotation marks

and citation omitted).  Express "ERISA preemption analysis . . .

involves two central questions: (1) whether the plan at issue is an

'employee benefit plan' and (2) whether the cause of action

'relates to' this employee benefit plan." McMahon v. Digital Equip.

Corp., 162 F.3d 28, 36 (1st Cir. 1998).  Because the NMC SERP is an

ERISA-regulated "employee benefit plan," our preemption analysis

focuses on whether Hampers's cause of action "relates to" the NMC

SERP.    

  In adopting  514(a), Congress deliberately rejected

narrower preemption language directed at "state laws relating to

the specific subjects covered by ERISA,"  Shaw v. Delta Air Lines,

Inc., 463 U.S. 85, 98 (1983) (emphasis added), choosing instead to

supplant all state laws that "relate to" ERISA-regulated plans.  In

Shaw, the Supreme Court observed that "[a] law 'relates to' an

employee benefit plan, in the normal sense of the phrase, if it has

a connection with or reference to such a plan."  Id.  This "early

attempt[] by the Supreme Court to interpret ERISA's preemption

clause relied heavily upon textual analysis and a dictionary

definition of 'relate to,'"  Plumbing Indus. Bd., Plumbing Local

Union No. 1 v. Howell Co., 126 F.3d 61, 66 (2d Cir. 1997), and led

to the conclusion that ERISA preemption was "conspicuous for its

breadth,"  FMC Corp. v. Holliday, 498 U.S. 52, 58 (1990).  Indeed,

ERISA preempts a state law that has a connection with or refers to

an ERISA-regulated benefits plan, "even if the law is not

specifically designed to affect such plans, or the effect is only

indirect and even if the law is consistent with ERISA's substantive

requirements."  District of Columbia v. Greater Washington Bd. of

Trade, 506 U.S. 125, 130 (1992) (internal quotation marks and

citations omitted); see also Rosario-Cordero v. Crowley Towing &

Transp. Co., 46 F.3d 120, 123 (1st Cir. 1995) ("[A] state law may

relate to an employee benefit plan even though the law does not

conflict with ERISA's own requirements . . . .").  

  Yet, from ERISA's inception, the Supreme Court 

recognized that "[s]ome state actions may affect employee benefit

plans in too tenuous, remote, or peripheral a manner to warrant a

finding that the law 'relates to' the plan," Shaw, 463 U.S. at 100

n.21, and that such "is the case with many laws of general

applicability," Greater Washington Bd. of Trade, 506 U.S. at 130

n.1.  Drawing the line between those state laws that "relate to"

ERISA-regulated plans, and those that are only "tenuous, remote, or

peripheral" has proven considerably difficult in practice,

producing an "avalanche of litigation."  De Buono v. NYSA-ILA Med.

& Clinical Serv. Fund, 520 U.S. 806, 809 n.1 (1997) (collecting

Supreme Court ERISA preemption cases and documenting the enormous

volume of cases in the lower federal courts).  This case calls upon

us to once again draw such a line.

  In drawing that line, we find cases emphasizing ERISA's

carefully crafted civil enforcement scheme particularly relevant. 

See, e.g., Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987);

Ingersoll-Rand, 498 U.S. at 143-44; Fitzgerald v. Codex Corp., 882

F.2d 586, 588 (1st Cir. 1989) (concluding that preemption extends

to "causes of action within the scope of the civil enforcement

provisions of ERISA.").  In Pilot Life, the Supreme Court concluded

that "[t]he deliberate care with which ERISA's civil enforcement

remedies were drafted and the balancing of policies embodied in its

choice of remedies argue strongly for the conclusion that ERISA's

civil enforcement remedies were intended to be exclusive."  Id. at

54 (emphasis added).  The Court explained:

    In sum, the detailed provisions of  502(a)

  set forth a comprehensive civil enforcement

  scheme that represents a careful balancing of

  the need for prompt and fair claims settlement

  procedures against the public interest in

  encouraging the formation of employee benefit

  plans. The policy choices reflected in the

  inclusion of certain remedies and the

  exclusion of others under the federal scheme

  would be completely undermined if ERISA-plan

  participants and beneficiaries were free to

  obtain remedies under state law that Congress

  rejected in ERISA.



Id. 

  Similarly, in Turner v. Fallon Community Heath Plan, 127

F.3d 196 (1st Cir. 1997), we found state common law claims 

preempted after determining that they fell within ERISA's exclusive

civil enforcement regime.  The plaintiff brought breach of contract

and other state law claims, and a claim under ERISA  502(a)(1)(B),

29 U.S.C.  1132(a)(1)(B), against a health maintenance

organization, charging that it wrongly denied a request to fund a

certain cancer treatment.  See id. at 197-98.  The plaintiff sought

compensatory damages, arguing "that if ERISA provided no federal

[damages] remedy, it ought not be read to preempt his state-law

claims;" alternatively, "if ERISA preempted the state-law claims,

then a federal remedy ought to be inferred or created by the court

to permit damages for wrongful withholding of treatment under the

employee benefits plan."  Id. at 198.  We rejected both arguments,

finding the state law claims preempted and declining the

plaintiff's invitation to fashion a federal remedy not authorized

by ERISA's remedial scheme.  See id. at 198-200.  First, we

concluded that ERISA  501(a)(1)(B), 29 U.S.C.  1132(a)(1)(B),

provides a remedy to "secure benefits under the plan rather than

damages for a breach of the plan."  Id. at 198 (emphasis added). 

We noted that "the Supreme Court has stressed that ERISA does not

create compensatory or punitive damage remedies where an

administrator of a plan fails to provide the benefits due under

that plan."  Id. (citing Massachusetts Mut. Life Ins. Co. v.

Russell, 473 U.S. 134, 147 (1985)).  We emphasized that Congress's

decision not to allow causes of action for damages under ERISA "is

not a minor technicality: damage awards may increase effective

coverage but may also add significantly to the costs of coverage." 

Id. at 198-99.  Second, we held that although "[a]bsent preemption,

a health benefits plan . . . could certainly be treated as a

contract enforceable under state law and subject to the usual

contractual remedies, including compensatory damages," ERISA's

preemption clause "preclude[s] state claims to enforce rights under

an ERISA plan or obtain damages for the wrongful withholding of

those rights."  Id. at 199.  

  While we acknowledged in Turner that the Supreme Court

has "set some new limits on preemption," we stressed that ERISA

continues to preempt "a state's attempt to provide state remedies

for what is in essence a plan administrator's refusal to pay

allegedly promised benefits." Id. at 199.  Such reasoning is

consistent with, and indeed supported by New York State Conference

of Blue Cross & Blue Shield Plans v. Travelers Insurance Co., 514

U.S. 645, 656 (1995), the case in which the Supreme Court first

acknowledged the unworkability of a literal reading of ERISA 

514(a)'s "relate to" standard, and ruled that courts must "look

instead to the objectives of the ERISA statute as a guide to the

scope of the state law that Congress understood would survive."

According to the Travelers Court, ERISA's purpose was "'to ensure

that plans and plan sponsors would be subject to a uniform body of

benefits law.'"  Id. at 656 (quoting Ingersoll-Rand, 498 U.S. at

142).  The Court identified three categories of state laws that

"relate to" ERISA plans in such a way that preemption of those laws

furthers this purpose: (1) state laws that "mandate[] employee

benefit structures or their administration," (2) state laws that

"bind plan administrators to [a] particular choice," and (3) state

law causes of action that provide "alternative enforcement

mechanisms" to ERISA's enforcement regime.  See id. at 658-59.  The

third category has particular relevance for our present inquiry. In

this vein, we have stated that in order to assess whether the state

law cause of action is an alternative enforcement mechanism, we

must "look beyond the face of the complaint" and determine the real

nature of the claim "regardless of plaintiff's . . .

characterization."  Danca v. Private Health Care Sys., Inc., 185

F.3d 1, 5 (1st Cir. 1999). 



B.  Hampers's State Law Contract Claim

  Hampers's complaint alleged a cause of action under ERISA

based on precisely the same conduct that underlies his state law

contract claim.  In particular, in Count III of the complaint,

entitled "ERISA: The NMC SERP," Hampers asserted that by virtue of

the 1991 Agreement, Grace had a "duty to include Hampers as a

participant in the NMC SERP," and breached that duty by "causing

him to be excluded from the NMC SERP."  In Count II of the

complaint, entitled, "Contract: Retirement Benefit," Hampers argued

that under the terms of the 1991 Agreement with Grace he was

"entitled to the full pension benefits of the NMC retirement plan

as it existed on the date of his retirement, specifically including

such benefits under the NMC qualified plan and the NMC SERP." 

Hampers contended that "when a SERP for NMC senior executives . .

. was created in or about November 15, 1995, Grace caused Dr.

Hampers to be excluded from the NMC SERP, and NMC so excluded Dr.

Hampers."  According to Hampers, this conduct constituted a breach

of the 1991 Agreement.  That the very same conduct--Grace's failure

to include Hampers in the NMC SERP--underlies both Hampers's state

law contract claim and his ERISA-benefits claim suggests that the

state law claim is an alternative mechanism for obtaining ERISA

plan benefits.

  As relief, Hampers primarily sought benefits under the

NMC SERP.  First, he sought a declaratory judgment that he is

"entitled to participate in the NMC SERP and is entitled to receive

all such benefits as to which he is entitled under the NMC SERP,"

and he petitioned the court to "order that Grace . . . cause

Hampers to be enrolled in the NMC SERP forthwith and cause the NMC

SERP to disburse to Hampers his rightful annuity as of January 1,

1997 at such amount as he would have been entitled to had Hampers

been included in the SERP from the day of its creation on or about

November 15, 1995."  Moreover, even with respect to Hampers's state

law claim for contract damages, he asserts that "upon a Jury's

finding that Grace is liable to Dr. Hampers under the 1991

Agreement . . . [,] the district court [would] have to face the

issue of the appropriateness of an injunctive order directed to NMC

and Fresenius that they enroll Hampers in the NMC SERP." 

  Hampers's complaint requested "damages for the loss

caused by [the defendants'] illegal conduct, including interest,

costs and attorneys [sic] fees pursuant to 29 U.S.C.  1132(g)

[ERISA  502(g)] and other applicable provisions of law."  Hampers

therefore linked his claim for damages to a request for attorneys'

fees authorized under ERISA, but not authorized under state law.

Moreover, in attempting to prove the "illegal conduct"--Grace's

decision to deny him participation rights in the NMC SERP--Hampers

relied on the terms of the NMC SERP, arguing that because the SERP

defines its benefits with respect to the NMC qualified plan, the

term "NMC retirement plan" in the 1991 Agreement must include both

the qualified plan and the SERP.  We have consistently held that a

cause of action "relates to" an ERISA plan when a court must

evaluate or interpret the terms of the ERISA-regulated plan to

determine liability under the state law cause of action.  See

McMahon v. Digital Equip. Corp., 162 F.3d. 28, 38 (1st Cir. 1998);

Boston Children's Heart Found., Inc. v. Nadal-Ginard, 73 F.3d 429,

440 (1st Cir. 1996); Carlo v. Reed Rolled Thread Die Co., 49 F.3d

790, 793-94 (1st Cir. 1995); Vartanian v. Monsanto Co., 14 F.3d

697, 698-99 (1st Cir. 1994).  Finally, Hampers measured his damages

by reference to the NMC SERP, contending that, as a participant, he

would have been entitled to approximately $250,000 per year in

additional annual pension benefits.  We have held that ERISA

preempts state law causes of action for damages where the damages

must be calculated using the terms of an ERISA plan.  See Carlo, 49

F.3d at 794. 

  Hampers concedes that as against defendants NMC and

Fresenius, his breach of contract claim is properly preempted

because "the relief he seeks is inclusion in the NMC SERP."  As

against Grace, however, Hampers insists that he "must necessarily

and exclusively seek money damages due to the fact that Grace no

longer has any authority or control over the NMC SERP," having

transferred its ownership of NMC to Fresenius in August 1996 and

relinquished all administrative duties relating to the NMC SERP. 

Thus, Hampers admits that his claim against Grace would have been

preempted if Grace had not, subsequent to the time of its alleged

breach of the 1991 Agreement, relinquished its responsibility over

the NMC SERP.

  The mere fortuity that Grace, subsequent to the

occurrence of the conduct at issue in this case, relinquished its

responsibility over the NMC SERP does not affect the ERISA

preemption analysis.  Hampers's claim is directed at Grace's

alleged breach of its promise to enroll him in the NMC SERP. 

Specifically, Hampers argues that under the 1991 Agreement he was

"entitled to the full pension benefits of the NMC retirement plan

as it existed on the date of his retirement, specifically including

such benefits under the NMC qualified plan and the NMC SERP," but

that "Grace caused Dr. Hampers to be excluded from the NMC SERP,

and NMC so excluded Dr. Hampers."  Thus, the wrongful conduct

alleged by Hampers involves a determination of whether benefits

will be paid under an ERISA-governed plan.  In deciding not to

enroll Hampers in the NMC SERP, Grace was acting in its capacity as

an ERISA employer and fiduciary with responsibility over the

administration of the plan.  If Grace had not exercised

"discretion and authority or control respecting the management,

disposition and administration of the NMC SERP, including but not

limited to, the discretion of who is to be included for

participation in the NMC SERP," as Hampers asserted in his

complaint, Grace simply could not have been in breach by failing to

use its "discretion," "authority," or "control" to include Hampers

in the SERP.

  Thus, it is only by virtue of Grace's status as an ERISA

employer with direct control over the administration and operation

of the NMC SERP that Grace could have breached the 1991 Agreement

in the way Hampers insists that it did.  Consequently, this is not

a case where the defendant is being sued for wrongful conduct

committed in its individual capacity, see, e.g., Wilson v.

Zoellner, 114 F.3d 713, 715 (8th Cir. 1997) (claim of

misrepresentation against an insurance agent); Stetson v. PFL Ins.

Co., 16 F. Supp. 2d 28, 29 (D. Me. 1998) (same); see also Golas v.

Homeview Inc., 106 F.3d 1, 4 (1st Cir. 1997) (Bownes, J.,

concurring) (claim brought against insurance broker acting in his

individual capacity), nor is this a case where the defendant is a

third party insurer or service provider who is not an ERISA entity-

-plan, employer, participant, beneficiary, fiduciary--at all, see,

e.g., Woodworker's Supply, Inc. v. Principal Mut. Life Ins. Co.,

170 F.3d 985, 991 (10th Cir. 1999) (claims against insurer for

misconduct in selling life insurance); Geweke Ford v. St. Joseph's

Omni Preferred Care, Inc., 130 F.3d 1355, 1357 (9th Cir. 1997)

(contract claims against third party provider of insurance and

administrative services); Arizona State Carpenters Pension Trust

Fund v. Citibank Arizona, 125 F.3d 715, 717-18 (9th Cir. 1997)

(claims against bank providing custodial services); Coyne & Delany

Co. v. Selman, 98 F.3d 1457, 1460-61 (4th Cir. 1996) (malpractice

claim against insurance professionals).  



C.  Conclusion

  In summary, we conclude that Hampers's state law contract

claim against Grace "relates to" the NMC SERP within the meaning of

ERISA's preemption clause because Hampers's state law claim is an

alternative to his claims for NMC SERP benefits against Grace, NMC,

and Fresenius brought under ERISA.  We base this conclusion on

these factors: (1) Hampers's state law claim against Grace alleges

precisely the same conduct that underlies his claims for SERP

benefits under ERISA; (2) the relief requested by Hampers focuses

primarily on NMC SERP benefits; (3) finding Grace liable for breach

of contract might require the court to order the NMC SERP to pay

plan benefits; (4) the only claim for damages in the complaint is

linked to a request for attorneys' fees under ERISA; (5) Hampers

calculates the amount of his alleged damages by reference to the

NMC SERP; (6) the central liability question at issue in his state

law claim against Grace--whether the 1991 Agreement promised him

inclusion in the NMC SERP must be viewed in light of the terms of

the NMC SERP and the NMC qualified plan; and (7) Grace's decision

to deny Hampers participation rights in the ERISA-regulated plan--

the conduct at issue in the state law claim--resulted from a

decision made by Grace in its capacity as an ERISA employer with

responsibility and authority over the ERISA-regulated plan. 

Accordingly, the district court did not err in finding Hampers's

state law claim against Grace preempted and denying his demand for

a jury trial. 

  Affirmed.