Stanford Law School - Robert Crown Law Library

Filed 12/15/03

IN THE SUPREME COURT OF CALIFORNIA

R. BETANCOURT et al.,
Plaintiffs and Appellants,
S103942
v.
Ct.App. 2/6 B145835
STORKE HOUSING INVESTORS et al., )

Santa
Barbara
County
Defendants and Respondents. )
Super. Ct. No. 1003927

We granted review to determine whether the federal Employee Retirement
Income Security Act of 1974 (ERISA) (29 U.S.C. § 1001 et seq.) preempts a
mechanic’s lien action (Civ. Code, § 3110)1 brought by laborers to recover unpaid
contributions to their employee benefit plans. ERISA preempts state laws that
“relate to” employee benefit plans. (29 U.S.C. § 1144(a).) In 1991, we held that
ERISA preempted a similar mechanic’s lien statute (§ 3111) that “single[d] out
ERISA plans for special treatment” and, thus, related to employee benefit plans.
(Carpenters So. Cal. Admin. Corp. v. El Capitan Development Co. (1991) 53
Cal.3d 1041, 1049 (El Capitan).) Because section 3110 is a law of general

1
Civil Code section 3110, in pertinent part, provides that “all persons and
laborers of every class” are entitled to “a lien upon the property upon which they
have bestowed labor . . . for the value of such labor done . . . .”

All further statutory references are to the Civil Code unless otherwise
noted.
1

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applicability and does not “relate to” ERISA plans (29 U.S.C. § 1144(a)), we
conclude that ERISA does not preempt plaintiffs’ action.
FACTUAL AND PROCEDURAL BACKGROUND
The facts are largely taken from the Court of Appeal’s opinion.
R. Betancourt and other employees (laborers) are union members who
worked for R. P. Richards, a subcontractor of Trabucco & Associates. R. P.
Richards employed laborers pursuant to a collective bargaining agreement
(Agreement) between Trabucco and laborers’ union, District Council No. 16 of the
United Association of Journeymen and Apprentices of the Plumbing and
Pipefitting Industry of the United States and Canada (Union).
Laborers worked on a residential construction project, which Storke
Housing Investors and BDC Storke Development (collectively, Storke) owned.
According to the Agreement, laborers were entitled to an hourly compensation
package, including wages and benefits. Laborers received their cash wages, but R.
P. Richards failed to make contributions to the Union’s trust funds for the benefit
of laborers. Pursuant to section 3110, laborers recorded a mechanic’s lien for
unpaid contributions in the amount of $33,236.56 against Storke’s real property.
In May 2000, laborers, as individuals and as members of Union, and Union, as a
party to the Agreement but not as a trust fund (collectively, plaintiffs) filed the
instant action to foreclose on the section 3110 lien.
Storke demurred, contending that the amounts due were fringe benefit
contributions owing to Union’s employee benefit plan, and, as such, ERISA
preempted plaintiffs’ action. (29 U.S.C. § 1144(a).) Relying on our decision in El
Capitan, supra, 53 Cal.3d 1041, the trial court concluded that ERISA preempted
plaintiffs’ action. The court sustained Storke’s demurrer without leave to amend
and dismissed the action.
2

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Plaintiffs appealed. The Court of Appeal reversed the trial court’s
judgment. It concluded that “[b]ecause decisions of the United States Supreme
Court subsequent to El Capitan have dramatically narrowed the preemptive scope
of ERISA, we hold that ERISA does not bar this action. We conclude that we are
not bound by El Capitan.” The Court of Appeal reasoned, “Section 3110 is a state
law of general applicability which creates no rights or restrictions concerning the
administration or funding of ERISA plans. Therefore, it matters not that the
remedy provided by section 3110foreclosure on the landowner’s propertyis
not a remedy provided to redress violations of ERISA. (See 29 U.S.C. §
1132(d)(2).)” Our review follows.
DISCUSSION
“On review of the judgment of the Court of Appeal reversing the superior
court’s orders sustaining defendants’ demurrers, we examine the complaint de
novo to determine whether it alleges facts sufficient to state a cause of action
under any legal theory, such facts being assumed true for this purpose.
[Citations.]” (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.) As
relevant here, plaintiffs’ complaint alleged that (1) laborers worked on Storke’s
real property for an hourly compensation pursuant to the Agreement; (2) laborers’
Union was a party to the Agreement; (3) laborers were due $33,236.56 for their
unpaid labor on the project; and (4) plaintiffs recorded a mechanic’s lien on the
Storke property pursuant to section 3110.
The parties do not seriously dispute that plaintiffs’ section 3110 action
seeks to recover unpaid contributions to their benefit plans. Though section 3110
is not limited to an express trust fund (see § 3111), Storke maintains that
plaintiffs’ “action is a backdoor attempt to do something that this court in El
Capitan has already ruled against.” Because El Capitan held that ERISA
preempts an action under section 3111, Storke contends an action under section
3

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3110 is similarly preempted. In contrast, plaintiffs urge this court to declare that
El Capitan is no longer good law in light of subsequent federal high court
decisions on ERISA preemption, but also claim that El Capitan is simply not
applicable to cases arising under section 3110. In order to address these claims,
we begin with a discussion of ERISA and its preemption clause.
A. ERISA
“ERISA is a comprehensive federal statutory scheme designed to promote
the interests of employees and their beneficiaries in employee benefit plans.” (El
Capitan, supra, 53 Cal.3d at p. 1047, citing Shaw v. Delta Air Lines, Inc. (1983)
463 U.S. 85, 90 (Shaw).) It “sets various uniform standards, including rules
concerning reporting, disclosure, and fiduciary responsibility, for both pension and
welfare plans. [Citations.]” (Shaw, supra, 463 U.S. at p. 91.) ERISA’s
preemption clause states, in pertinent part: “[T]he provisions of this subchapter
. . . 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)[2] of this title
. . . .” (29 U.S.C. § 1144(a), italics added.) “The basic thrust of the pre-emption
clause . . . was to avoid a multiplicity of regulation in order to permit the
nationally uniform administration of employee benefit plans.” (New York State
Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co. (1995) 514
U.S. 645, 657 (Travelers).)

2
As relevant here, “The term ‘employee benefit plan’ . . . means an
employee welfare benefit plan or an employee pension benefit plan or a plan
which is both” established or maintained by an employer engaged in commerce or
in any industry or activity affecting commerce and/or by an employee organization
representing employees so engaged. (29 U.S.C. § 1002(3); see 29 U.S.C.
§ 1003(a).)
4

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In its 1983 decision in Shaw, the high court pronounced 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.” (Shaw, supra, 463 U.S. at pp. 96-97,
fn. omitted.) In a later case, the high court explained that “to determine whether a
state law has the forbidden connection, we look both to ‘the objectives of the
ERISA statute as a guide to the scope of the state law that Congress understood
would survive,’ [Travelers, supra, 514 U.S. at p. 656], as well as to the nature of
the effect of the state law on ERISA plans, id., at 658-659.” (California Div. of
Labor Standards Enforcement v. Dillingham Constr., N. A., Inc. (1997) 519 U.S.
316, 325 (Dillingham) [holding California’s prevailing wage statute is not
preempted by ERISA].) As to an impermissible reference, the high court
concluded that “[w]here a State’s law acts immediately and exclusively upon
ERISA plans, . . . , or where the existence of ERISA plans is essential to the law’s
operation, . . . , that ‘reference’ will result in pre-emption.” (Dillingham, supra,
519 U.S. at p. 325.)
The high court has also held that “state laws providing alternative
enforcement mechanisms also relate to ERISA plans, triggering pre-emption. See
Ingersoll-Rand [Co. v. McClendon (1990) 498 U.S. 133].” (Travelers, supra, 514
U.S. at p. 658; see also Rush Prudential HMO, Inc. v. Moran (2002) 536 U.S. 355,
377-379 (Rush Prudential);3 Pilot Life, supra, 481 U.S. at p. 56.) “The policy

3
In Rush Prudential, the high court discussed the underpinnings for the
alternative enforcement mechanism rule set forth in Pilot Life Ins. Co. v. Dedeaux
(1987) 481 U.S. 41, 56 (Pilot Life). (Rush Prudential, supra, 536 U.S. at pp. 378-
379 [discussing cases].) After noting that since Pilot Life it has found only one
other state law that provided a prohibited alternative remedy (i.e., Ingersoll-Rand
Co. v. McClendon, supra, 498 U.S. 133 (Ingersoll-Rand)), the high court
ultimately found that the state law in question—Illinois’s statute requiring health
maintenance organizations (HMO’s) to provide independent review of disputes
(Footnote continued on next page.)
5

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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. . . . [¶] The deliberate care with which ERISA’s civil
enforcement remedies [in 29 United States Code section 1132(a)] 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.” (Pilot Life, supra, 481 U.S. at p. 54.) For example, the high court has
held that a state law wrongful discharge action based on an employer’s motivation
to avoid paying pension benefits (Ingersoll-Rand, supra, 498 U.S. at p. 145), and a
state common law action based on improper processing of an ERISA benefits
claim (Pilot Life, supra, 481 U.S. at p. 57), both impermissibly conflicted with
ERISA’s enforcement scheme.

(Footnote continued from previous page.)

between primary care physicians and HMO’s—did not conflict with ERISA’s civil
enforcement scheme because it did not provide a new cause of action or authorize
a new form of ultimate relief. (Rush Prudential, supra, 536 U.S. at pp. 379-380.)

The high court acknowledged that the alternative enforcement mechanism
rule “has, up to now, been far more straightforward than it is here.” (Rush
Prudential, supra, 536 U.S. at p. 378.) In contrast to the additional claim or
remedy at issue in Pilot Life and Ingersoll-Rand, the state statute in Rush
Prudential did not “enlarge” the relief available under ERISA. (Rush Prudential,
supra, 536 U.S. at p. 379.) “[A]lthough the reviewer’s determination would
presumably replace that of the HMO as to what is ‘medically necessary’ under this
contract, the relief ultimately available would still be what ERISA authorizes in a
suit for benefits under [29 United States Code section 1132(a).” (Rush Prudential,
supra, 536 U.S. at p. 380, fns. omitted.) Thus, the high court concluded that the
Illinois statute did not “fall within Pilot Life’s categorical preemption.” (Rush
Prudential, supra, 536 U.S. at p. 380.)
6

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Beginning with Travelers, the United States Supreme Court has narrowed
the scope of ERISA preemption. (Travelers, supra, 514 U.S. at p. 656 [court must
look “beyond the unhelpful text” of preemption clause];4 Dillingham, supra, 519
U.S. at pp. 324-325 [following Travelers]; De Buono v. NYSA-ILA Medical &
Clinical Services Fund (1997) 520 U.S. 806, 813-814 (De Buono) [same].) While
the high court recognized that ERISA’s preemption clause (29 U.S.C. § 1144(a))
was “clearly expansive,” the court clarified that its “relate to” language was not
intended to change “the starting presumption that Congress does not intend to
supplant state law.” (Travelers, supra, 514 U.S. at pp. 654-655; De Buono, supra,
520 U.S. at p. 813.)
In other words, “where federal law is said to bar state action in fields of
traditional state regulation, [citation], we have worked on the ‘assumption that the
historic police powers of the States were not to be superseded by the Federal Act
unless that was the clear and manifest purpose of Congress.’ ” (Travelers, supra,
514 U.S. at p. 655; De Buono, supra, 520 U.S. at p. 814 [respondents have
“considerable burden of overcoming ‘the starting presumption’ ”].) The high
court emphasized that “ ‘[p]re-emption does not occur . . . if the state law has only
a tenuous, remote, or peripheral connection with covered plans, as is the case with
many laws of general applicability.’ ” (Travelers, supra, 514 U.S. at p. 661.)

4
In Travelers, the high court held that ERISA did not preempt a New York
statute requiring hospitals to collect surcharges from patients whose insurance
coverage was paid by employee healthcare plans subject to ERISA, but not from
patients insured by a Blue Cross/Blue Shield plan. (Travelers, supra, 514 U.S. at
p. 649.) Because New York’s surcharges only indirectly affected the prices of
insurance policies, which was a result typical of traditional state regulation, the
court held the state law was not preempted by ERISA. (Travelers, supra, 514 U.S.
at p. 668.) “[A] law operating as an indirect source of merely economic influence
on administrative decisions . . . should not suffice to trigger pre-emption . . . .”
(Id. at p. 662.)
7

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B. Section 3110
Section 3110 provides that “all persons and laborers[5] of every class
performing labor upon or bestowing skill or other necessary services on . . . a
work of improvement shall have a lien upon the property upon which they have
bestowed labor . . . for the value of such labor done . . . whether done . . . at the
instance of the owner or of any person acting by his authority or under him as
contractor or otherwise.” Our state Constitution guarantees that “laborers of every
class[] shall have a lien upon the property upon which they have bestowed labor or
furnished material for the value of such labor done and material furnished; and the
Legislature shall provide, by law, for the speedy and efficient enforcement of such
liens.” (Cal. Const., art. XIV, § 3.) “ ‘The mechanic’s lien is the only creditors’
remedy stemming from constitutional command and our courts “have uniformly
classified the mechanics’ lien laws as remedial legislation, to be liberally
construed for the protection of laborers and materialmen.” ’ ” (Wm. R. Clarke
Corp. v. Safeco Ins. Co. (1997) 15 Cal.4th 882, 889 (Wm. R. Clarke).) Even
before our present Constitution was adopted in 1879, the first session of our state
Legislature enacted a mechanic’s lien law in 1850. (Connolly Development, Inc.
v. Superior Court (1976) 17 Cal.3d 803, 826 (Connolly).)
In concluding that ERISA did not preempt plaintiffs’ action, the Court of
Appeal reasoned that section 3110 is a statute governing the payment of wages
and thus, under federal case law, is the subject of traditional state regulation.
Noting that section 3110 does not refer to employee benefit trust funds, the Court
of Appeal characterized the provision as “a state law of general applicability that

5
In 1999, the Legislature amended the definition of “laborer” (§ 3089) to
include “an express trust fund described in Section 3111, to whom a portion of the
compensation of a laborer . . . is paid by agreement with that laborer or the
collective bargaining agent of that laborer.” (Stats. 1999, ch. 795, § 4.)
8

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creates no rights or restrictions concerning the administration or funding of ERISA
plans.”
Under the rationale of Travelers and Dillingham, we agree with the Court
of Appeal that ERISA does not preempt plaintiffs’ action under section 3110. The
state statute does not “relate to” ERISA plans. (29 U.S.C. § 1144(a).) In other
words, it does not make “reference to” or have a “connection with” ERISA plans.
(See Dillingham, supra, 519 U.S. at p. 324.)
Unlike section 3111, which we discuss further below, section 3110 is a
mechanic’s lien law of general application and does not itself refer to ERISA
plans. (See Burch v. George (1994) 7 Cal.4th 246, 273 [no contest law “is a
neutral state law of general application that here would only tenuously affect an
ERISA plan, if at all”].)6 As noted, though the Court of Appeal did not address
this, in 1999 the Legislature amended the definition of “laborer,” which is
referenced in section 3110, to include an express trust fund. (§ 3089, subd. (b).)
The amendment to section 3089, however, is “intended to give effect to the long-
standing public policy of this state to protect the entire compensation of laborers
on works of improvements, regardless of the form in which that compensation is
to be paid.” (§ 3089, subd. (b).) We conclude that section 3110 is not
“ ‘specifically designed to affect employee benefit plans.’ ” (Mackey v. Lanier
Collection Agency & Serv. (1988) 486 U.S. 825, 829 (Mackey).) Section 3110
does not “act[] immediately and exclusively upon ERISA plans,” or is “the
existence of ERISA plans . . . essential to the law’s operation.” (Dillingham,

6
“A state law that applies to a wide variety of situations, including an
appreciable number that have no specific linkage to ERISA plans, constitutes a
law of general application for purposes of 29 U.S.C. § 1144(a).” (Carpenters
Local Union No. 26 v. U.S. F.&G. Co. (1st Cir. 2000) 215 F.3d 136, 144-145
(U.S. Fidelity).)
9

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supra, 519 U.S. at p. 325, italics added; Southern Calif. IBEW-NECA Trust v.
Standard Indus. (9th Cir. 2001) 247 F.3d 920, 926 (Standard Industrial) [payment
bond statute “not necessarily limited to ERISA plans”; no impermissible
reference].) This section is “ ‘ “remedial legislation, to be liberally construed” ’ ”
to protect the rights of laborers and materialmen in general. (Wm. R. Clarke,
supra, 15 Cal.4th at p. 889.) Because section 3110 “ ‘functions irrespective of . . .
the existence of an ERISA plan,’ ” it “does not make reference to ERISA plans.”
(Dillingham, supra, 519 U.S. at p. 328, quoting Ingersoll-Rand, supra, 498 U.S. at
p. 139; Travelers, supra, 514 U.S. at p. 656.)
Nor does section 3110 have a “connection with” ERISA plans.
(Dillingham, supra, 519 U.S. at pp. 328-329; Travelers, supra, 514 U.S. at p.
662.) As a law of general applicability, section 3110 “does not bind ERISA plans
to anything.” (Dillingham, supra, 519 U.S. at p. 332.) This mechanic’s lien law
permits laborers and other persons, who may include participants in ERISA plans
or the plans themselves, to obtain a lien to secure payment for their labor and
materials. (§§ 3110, 3089.) Section 3110’s effect on ERISA plans, however, is
indirect at most because it does not compel plans to function in a certain way.
(Dillingham, supra, 519 U.S. at p. 333 [added inducement under Lab. Code, §
1777.5 is not “tantamount to a compulsion upon apprenticeship programs”];
Travelers, supra, 514 U.S. at p. 662 [surcharges under New York statute “leave
plan administrators right where they would be in any case, with the responsibility
to choose the best overall coverage for the money”].)
The high court has explained that “where federal law is said to bar state
action in fields of traditional state regulation, [citation], we have worked on the
‘assumption that the historic police powers of the States were not to be superseded
by the Federal Act unless that was the clear and manifest purpose of Congress.’ ”
(Travelers, supra, 514 U.S. at p. 655.) As noted, California’s mechanic’s lien law
10

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derives from constitutional command (Cal. Const., art. XIV, § 3) and dates back to
1850. (Wm. R. Clarke, supra, 15 Cal.4th at p. 889; Connolly, supra, 17 Cal.3d at
p. 826.) We have long recognized that it is within the state’s police power to
provide for enforcement of liens for labor and materials. (See Roystone Co. v.
Darling (1915) 171 Cal. 526, 540.) Storke fails to show that it was Congress’s
“ ‘clear and manifest purpose’ ” (Travelers, supra, 514 U.S. at p. 655), that
ERISA preempt our state’s long-standing mechanic’s lien laws. As the high court
explained, “We could not hold pre-empted a state law in an area of traditional state
regulation based on so tenuous a relation without doing grave violence to our
presumption that Congress intended nothing of the sort.” (Dillingham, supra, 519
U.S. at p. 334; see De Buono, supra, 520 U.S. at pp. 814-815 [describing types of
state laws Congress intended ERISA to preempt].)
Storke, however, maintains that section 3110 is preempted because it
constitutes an alternative enforcement mechanism to ERISA. (Travelers, supra,
514 U.S. at p. 658; Pilot Life, supra, 481 U.S. at p. 56; see El Capitan, supra, 53
Cal.3d at p. 1054.) In their section 3110 action, laborers seek to recover
delinquent contribution benefits from Storke, who is neither their employer nor a
signatory to the Agreement. Storke contends this is impermissible under El
Capitan, supra, 53 Cal.3d at page 1052, and is inconsistent with federal cases.
(See, e.g., EklecCo v. Iron Workers Union Sec. Funds (2d Cir. 1999) 170 F.3d
353, 357 (EklecCo) [New York’s mechanic’s lien law preempted as an alternative
enforcement mechanism]; Bast v. Prudential Ins. Co. of America (9th Cir. 1998)
150 F.3d 1003, 1010 [ERISA preempts state law claims even if plaintiffs are left
without a remedy]; Crull v. Gem Ins. Co. (9th Cir. 1995) 58 F.3d 1386, 1391, fn. 3
[Travelers does not “signal a retreat from Pilot Life’s holding” regarding the
exclusive remedies of ERISA].)
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Pointing to this case’s factual similarities with El Capitan, Storke claims
laborers “are seeking to have alternate responsible partiesparties who never
entered into any contractual arrangement with the trust funds, the Union, the
individual employees, or the employerto pay those contributions.”7 For reasons
that follow, we disagree that El Capitan compels the conclusion that ERISA
preempts section 3110. Nor does a section 3110 lien action constitute an
impermissible alternative enforcement mechanism for purposes of ERISA
preemption.
C. El Capitan
In
El Capitan, the employees were union members entitled to fringe benefit
contributions under a collective bargaining agreement. After their employer failed
to make contributions to the employees’ trust funds in excess of $121,000, the
funds’ administrator recorded trust fund liens under former section 31118 against

7
Storke maintains that plaintiffs also lack standing to bring an action to
recover funds owed directly to the employee trust fund: “The Union’s trust funds
are the actual and only entities entitled to recover the delinquent contributions due
under the collective bargaining agreement between the Union and R. P. Richards.”
(Fn. omitted.) Plaintiffs counter that under “the plain meaning of Section 3110,
there can be no doubt that the laborers or Individual Plaintiffs have standing to
enforce their mechanics’ lien rights. In fact, both the laborers and their
representative, the Union, have standing under Sections 3089 and 3110.”

We need not determine this issue because it does not directly bear on the
issue presented in this case, i.e., whether ERISA preempts a section 3110 action.
(See Rush Prudential, supra, 536 U.S. at p. 363, fn. 3 [defendant’s “true status . . .
is immaterial to our holding”].)
8
At the time of our 1991 decision, former section 3111 provided: “ ‘For
purposes of this chapter, an express trust fund established pursuant to a collective
bargaining agreement to which payments are required to be made on account of
fringe benefits supplemental to a wage agreement for the benefit of a claimant on
particular real property shall have a lien on such property in the amount of the
supplemental fringe benefit payments owing to it pursuant to the collective
(Footnote continued on next page.)
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El Capitan Development Company’s real property, on which the employees had
performed work. The administrator alleged that “because the unpaid contributions
were due on account of work performed on El Capitan’s property, section 3111
created liens on that property.” (El Capitan, supra, 53 Cal.3d at p. 1046.) We
held that the action under section 3111 was preempted under ERISA (29 U.S.C. §
1144(a)). (El Capitan, supra, 53 Cal.3d at p. 1056.)
In our 1991 decision, we recognized the broad scope of the key term,
“relate to,” in ERISA’s preemption clause (29 U.S.C. § 1144(a)), based on
congressional intent and high court decisions. (El Capitan, supra, 53 Cal.3d at pp.
1047-1049.) We concluded that “[a]ll that is necessary to invoke ERISA’s
statutory preemption provision is that the state law in question ‘relate to’ an
ERISA plan.” (Id. at p. 1047.) The state law in question was section 3111, which
we concluded “provid[ed] an additional method of funding, a lien against real
property . . . .” (El Capitan, supra, 53 Cal.3d at p. 1052.)
We determined that “section 3111 ‘relates to’ such plans by creating a
mechanism for enforcing an employer’s contribution obligations that Congress did
not provide.” (El Capitan, supra, 53 Cal.3d at pp. 1047-1048.) Relying on Pilot
Life, supra, 481 U.S. 41, and Iron Workers Pension Fund v. Terotechnology (5th
Cir. 1990) 891 F.2d 548, we emphasized that section 3111 was preempted because
this provision purported to regulate ERISA plans through a new cause of action or
remedy not provided under ERISA, the state’s lien laws. (El Capitan, supra, 53
Cal.3d at pp. 1048, 1051, 1052, 1054, 1055.) “ ‘The expectations that a federal

(Footnote continued from previous page.)

bargaining agreement.’ ” (El Capitan, supra, 53 Cal.3d at p. 1045, fn. 1; but see
Stats. 1999, ch. 795, § 7, amending § 3111.)
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common law of rights and obligations under ERISA-regulated plans would
develop, . . . would make little sense if the remedies available to ERISA
participants and beneficiaries under [29 U.S.C. § 1132(a)] could be supplemented
or supplanted by varying state laws.’ ” (El Capitan, supra, 53 Cal.3d at p. 1053,
quoting Pilot Life, supra, 481 U.S. at p. 56.) This recognition that section 3111 if
applied, would regulate the conditions under which the terms of an ERISA plan
might be enforced supported our conclusion that the section related to such plans
and thus was preempted. (El Capitan, supra, 53 Cal.3d at pp. 1048, 1051, 1054.)
We also rejected the argument that section 3111 was not preempted
because it was a generally applicable mechanism for enforcing judgments. (See
Mackey, supra, 486 U.S. 825 [general state garnishment statute not preempted].)
We explained that “[s]ection 3111 gives a trust fund a right to a lien against the
property of third parties, such as El Capitan, that the fund would not, and does not,
have under ERISA. . . . Therefore, section 3111 cannot be upheld under Mackey
as it creates a new substantive right against the property of a third party that is not
created by ERISA and, thus, goes beyond being a mere means of enforcing a
judgment.” (El Capitan, supra, 53 Cal.3d at p. 1055.) We also rejected the
contention that section 3111 only affected an employee benefit plan in a
“ ‘tenuous, remote, or peripheral’ manner”; rather, the provision had the
substantive effect of making an additional entity liable to the trust fund for
contributions. (El Capitan, supra, 53 Cal.3d at p. 1056.)
Contrary to Storke’s contention, El Capitan does not compel the conclusion
that section 3110 is preempted. In that decision, we explained the differences
between sections 3110 and 3111, though both provide mechanic’s lien remedies.
(El Capitan, supra, 53 Cal.3d at p. 1049 & fn. 3.) We stated that in contrast to
persons seeking a mechanic’s lien remedy under section 3110, ERISA plans do
not provide labor and materials for a construction project. (El Capitan, supra, 53
14

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Cal.3d at p. 1049.) But because section 3111 would treat ERISA plans the same
as persons who provide labor and materials by giving these plans a mechanic’s
lien remedy unavailable under ERISA, we concluded section 3111 would single
out ERISA plans for special treatment and thus “relates to” these plans. (El
Capitan, supra, 53 Cal.3d at p. 1049; Mackey, supra, 486 U.S. at p. 829.)
Though we recognized in El Capitan that by providing a new cause of
action or remedy section 3111 purported to regulate ERISA plans (El Capitan,
supra, 53 Cal.3d at p. 1051), our holding that section 3111 was preempted relied
heavily on the fact that the section is “designed to affect [ERISA plans]
specifically.” (El Capitan, supra, 53 Cal.3d at p. 1049.) We observed that the
high court “has ‘virtually taken it for granted that state laws which are
“specifically designed to affect employee benefit plans” are pre-empted under §
514(a).’ ” (Ibid., quoting Mackey, supra, 486 U.S. at p. 829.) We emphasized
that unlike section 3110, “[s]ection 3111 is specifically for the use of express trust
funds established pursuant to collective bargaining agreements.” (El Capitan,
supra, 53 Cal.3d at p. 1049, fn. 3.)9

9
The 1999 amendment adding express trust funds to the parties permitted to
bring an action under section 3110 (see § 3089; Stats. 1999, ch. 795, § 4), does not
alter our conclusion that section 3110 does not single out ERISA plans for special
treatment. (El Capitan, supra, 53 Cal.3d at p. 1049.) The cross-reference to
express trust funds in this context is not dispositive for ERISA preemption. For
example, in Dillingham, although Labor Code section 1777.5’s prevailing wage
statute appeared to apply only to apprenticeship programs that were ERISA plans,
the high court determined that not all such programs were covered by ERISA.
(Dillingham, supra, 519 U.S. at pp. 325-327 & fn. 5.) The court ultimately held
that Labor Code section 1777.5 was not preempted by ERISA. (Dillingham,
supra, 519 U.S. at pp. 328, 334.) Likewise, we conclude that even though section
3110 includes express trust funds among the long list of those entitled to liens, this
inclusion is not determinative for ERISA preemption.
15

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We conclude that section 3110 does not constitute an alternative
enforcement mechanism subject to ERISA preemption. (See U.S. Fidelity, supra,
215 F.3d 136; see also Standard Industrial, supra, 247 F.3d 920.) In U.S.
Fidelity, the First Circuit Court of Appeals held that a Massachusetts bond
statute—requiring a general contractor to post a bond to secure payment for a
subcontractor’s fringe benefit contributions—was not preempted by ERISA. After
noting the “changed legal landscape” of ERISA preemption jurisprudence (U.S.
Fidelity, supra, 215 F.3d at p. 138), U.S. Fidelity concluded the bond statute did
not constitute an alternative enforcement mechanism: “Those state laws which
touch upon enforcement but have no real bearing on the intricate web of
relationships among the principal players in the ERISA scenario (e.g., the plan, the
administrators, the fiduciaries, the beneficiaries, and the employer) are not subject
to preemption on this basis. [Citation.] It follows that a state statute which only
creates claims against a surety does not constitute an impermissible alternative
enforcement mechanism as that term is used in ERISA jurisprudence.” (Id. at p.
141.) U.S. Fidelity deemed the state bond statute a law of general applicability (id.
at p. 145), and recognized the statute “regulates an area of the law traditionally
thought to be the states’ preserve: enforcing contracts under state law for the
citizenry’s protection. [Citations.]” (Id. at p. 141.)
Likewise, we conclude that section 3110 is a statute that has “no real
bearing on the intricate web of relationships among the principal players in the
ERISA scenario . . . .” (U.S. Fidelity, supra, 215 F.3d at p. 141.) As a remedial
statute of general applicability, section 3110 does not regulate the relationship
between ERISA plans and participants or beneficiaries. (See ante, at pp. 9-10.)
Plaintiffs here are laborers and their union that seek to secure a mechanic’s lien on
Storke’s real property for full payment for their labor. They are neither suing or
being sued in an effort to enforce the terms of an ERISA plan. (See Laborers’
16

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Trust Funds v. Maui Prince Hotel (Hawai’i 1996) 918 P.2d 1143, 1154 (Maui
Prince Hotel) [state lien law not preempted because it “merely provides a ‘remedy
available to a certain class of creditors that transcends ERISA obligations and
concerns’ ”].) Neither the plan, nor its administration and management, nor the
benefits it provides, are implicated except insofar as it may be the recipient of any
amounts recovered under the lien. To the extent the mechanic’s lien remedy
“could be interpreted as regulating relationships between an ERISA plan and a
third party, the relationships are too tenuous, remote, or peripheral to be
preempted by ERISA.” (Standard Industrial, supra, 247 F.3d at p. 929.)
The high court’s decision in Mackey, supra, 486 U.S. 825, further helps
distinguish this case from El Capitan. While the high court held that Georgia’s
general garnishment law was not preempted, it concluded that the state’s
antigarnishment provision that expressly referred to, and applied solely to, ERISA
employee benefit plans was subject to ERISA preemption. (Mackey, supra, 486
U.S. at p. 829.) The antigarnishment provision protected ERISA welfare benefit
plans, but not non-ERISA plans, from garnishment. (Id. at p. 830 & fn. 4.) As the
high court explained, “It is this ‘singling out’ that pre-empts” the state statute. (Id.
at p. 838, fn. 12.) On the other hand, the court concluded the general garnishment
law was among those “state-law methods for collecting money judgments [that]
must, as a general matter, remain undisturbed by ERISA; otherwise, there would
be no way to enforce such a judgment won against an ERISA plan.” (Id. at p.
834.)10

10
Plaintiffs and their amici curiae urge us to overrule El Capitan, supra, 53
Cal.3d 1041. We decline to do so. As we have discussed, El Capitan is
distinguishable from this case. Moreover, our holding in El Capitan was based on
statutory language that the Legislature has since amended. (See El Capitan,
supra, 53 Cal.3d at p. 1045, fn. 1 [quoting former § 3111]; Stats. 1999, ch. 795, §
(Footnote continued on next page.)
17

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Storke asserts that the “multiplicity and inconsistency of the lien laws from
state to state, and the variety of conditions that they impose on employers, their
benefit plans and third parties are precisely the burdens that Congress intended for
ERISA’s preemption provision to avoid.” We are unpersuaded. First, Storke fails
to identify any specific material differences between our state lien law and any
from other jurisdictions. Second, and more importantly, the high court has
explained that a state law “that increases the cost of providing benefits to covered
employees will have some effect on the administration of ERISA plans, but that
simply cannot mean that every state law with such an effect is pre-empted by the
federal statute.” (De Buono, supra, 520 U.S. at p. 816, fn. omitted.)
D. Other Decisions
Several
post-Travelers cases from other jurisdictions have reached
conclusions different from ours. (See, e.g., EklecCo, supra, 170 F.3d at p. 357
[lien statute making property owner liable for employer’s ERISA contributions
preempted as alternative enforcement mechanism]; Plumbing Industry Bd. v. E.W.
Howell Co., Inc. (2d Cir. 1997) 126 F.3d 61, 68-69 (Plumbing Industry Bd.)

(Footnote continued from previous page.)

7 [amending § 3111].) Approximately eight years after our El Capitan decision,
the Legislature amended section 3111 “to restore the protection created by the
mechanic’s lien law adopted at the first legislative session of this state, refined and
expanded over a century and a half, for the just pay due to workers on construction
jobs, without discrimination as to the manner in which the pay is allocated,
whether union or nonunion, in cash or a combination of cash and benefits.” (Stats.
1999, ch. 795, § 9.) The Legislature’s intent was “to clarify that the protections
offered in this title are meant to cover the entire compensation package of
employees, and not to single out or treat differently any particular form of
compensation.” (Ibid.) We have no occasion to consider whether ERISA
preempts current section 3111 and express no view on this issue.
18

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[same]; IBEW v. TRIG Elect. Const. Co. (Wash. 2000) 13 P.3d 622, 627 (Trig)
[public works lien statute making third party contractor liable for ERISA
contributions preempted as “alternative funding mechanism for the ERISA
plans”]; but see Maui Prince Hotel, supra, 918 P.2d at pp. 1154-1155 [neutral and
general mechanic’s and materialman’s lien statute not preempted].) As one court
observed, “Because the state law impermissibly adds to the exclusive list of parties
ERISA holds responsible for an employer’s benefit obligations, it cannot stand.”
(Plumbing Industry Bd., supra, 126 F.3d at p. 69.) However, we find these cases
to be inapposite.
Although these cases recognized the “starting presumption that Congress
does not intend to supplant state law” in areas of traditional state regulation
(Travelers, supra, 514 U.S. at p. 654), we conclude that none of these cases gave
due consideration to the presumption before finding preemption. (Plumbing
Industry Bd., supra, 126 F.3d at pp. 68-69; EklecCo, supra, 170 F.3d at p. 357;
Trig, supra, 13 P.3d at pp. 626-627.) Indeed, in discussing the alternative
enforcement mechanism doctrine, these cases did not expressly consider whether
the state statute at issue was in an area of traditional state regulation. (Plumbing
Industry Bd., supra, 126 F.3d at pp. 68-69; EklecCo, supra, 170 F.3d at p. 357;
Trig, supra, 13 P.3d at pp. 626-627; see also Trig, supra, 13 P.3d. at p. 629 (dis.
opn. of Johnson, J.) [“the majority avoids any meaningful application of the post-
Travelers doctrine and reaches a conclusion inconsistent with current law”].) This
presumption against preemption is particularly salient in this case given that our
state has long recognized the importance of the mechanic’s lien remedy, which is
within the proper exercise of our state’s police power. (Roystone Co. v. Darling,
supra, 171 Cal. at p. 540; Connolly, supra, 17 Cal.3d at p. 826; see ante, at pp. 8,
11.)
19

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Moreover,
in
Plumbing Industry Bd., supra, 126 F.3d 61, relied on by
EklecCo, supra, 170 F.3d 353, the New York lien law at issue was specifically
amended “to better protect the rights of workers by ‘supplement[ing]’ the scheme
for enforcing employee benefit obligations arising in connection with public
works contracts [citation].” (Plumbing Industry Bd., supra, 126 F.3d at p. 65.) In
concluding that ERISA preempted the lien law as an alternative enforcement
mechanism, the Second Circuit Court of Appeals observed, “Were states free to
supplement the enforcement matrix at will, Congress’ policy choices would be
undermined.” (Plumbing Industry Bd., at p. 68, citing Pilot Life, supra, 481 U.S.
at p. 54.) In contrast, section 3110 here was not designed to “supplement” the
enforcement scheme for employee benefit obligations. Instead, this mechanic’s
lien law implements our state’s constitutional mandate to protect “laborers of
every class” and allow them to recover their entire compensation, regardless of the
form the compensation takes. (Cal. Const., art. XIV, § 3; Wm. R. Clarke, supra,
15 Cal.4th at p. 889; see also § 3089, subd. (b).)
DISPOSITION
We affirm the Court of Appeal’s judgment.
CHIN, J.
WE CONCUR:

GEORGE, C.J.
KENNARD, J.
BAXTER, J.
WERDEGAR, J.
BROWN, J.
MORENO, J.
20

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See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Betancourt v. Storke Housing
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted

XXX 94 Cal.App.4th 709
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S103942
Date Filed: December 15, 2003
__________________________________________________________________________________

Court:

Superior
County: Santa Barbara
Judge: Thomas Pearce Anderle

__________________________________________________________________________________

Attorneys for Appellant:

Gilbert & Sackman, Laurie A. Traktman, Kenneth J. Sackman and Steven M. Rehaut for Plaintiffs and
Appellants.

Reich, Adell, Crost & Cvitan and J. David Sackman for Trustees of the Southern California IBEW-NECA
Pension Trust Fund and the Construction Laborers Trust Fund for Southern California Administrative
Company, LLC, as Amici Curiae on behalf or Plaintiffs and Appellants.

DeCarlo, Connor & Selvo and Desmond C. Lee for Carpenters Southern California Administrative
Corporation as Amicus Curiae on behalf of Plaintiffs and Appellants.

__________________________________________________________________________________

Attorneys for Respondent:

Mullen & Henzell, Derek B. Lipscombe and Rafael Gonzalez for Defendants and Respondents.

---

Counsel who argued in Supreme Court (not intended for publication with opinion):

Laurie A. Traktman
Gilbert & Sackman
6100 Wilshire Boulevard, Suite 700
Los Angeles, CA 90048-5114
(323) 938-3000

J. David Sackman
Reich, Adell, Crost & Cvitan
3550 Wilshire Boulevard, Suite 2000
Los Angeles, CA 90010-2421
(213) 386-3860

Derek B. Lipscombe
Mullen & Henzell
112 East Victoria Street
Post Office Drawer 789
Santa Barbara, CA 93102-0789
(805) 966-1501

---

Opinion Information

Date:	Docket Number:
Mon, 12/15/2003	S103942

Disposition
Dec 15 2003	Opinion: Affirmed

Dockets
Jan 28 2002	Petition for review filed   respondents Storke Housing Investors, etal
Jan 31 2002	Received Court of Appeal record   1-doghouse
Feb 19 2002	Answer to petition for review filed   Appellants R. Betancourt et al. (40n/Fed-Express)
Mar 22 2002	Time extended to grant or deny review   to and including 4/26/2002
Apr 10 2002	Petition for Review Granted (civil case)   Votes: Baxter, ACJ., Kennard, Chin & Brown, JJ. George, CJ., was absent and did not participate.
Apr 22 2002	Certification of interested entities or persons filed   by Laurie A. Traktman, attorney for plaintiffs and appellants
Apr 26 2002	Certification of interested entities or persons filed   by Derek B. Lipscome for defendants/respondents
May 10 2002	Opening brief on the merits filed   by counsel for resps (Storke Housing Investors, et al.)
Jun 10 2002	Answer brief on the merits filed   counsel for appellants R. Betancourt, et al.,
Jul 3 2002	Note:
Jul 5 2002	Received letter from:   Mullen & Henzell dated 7/3/2002 - Reply Brief/Merits mistakenly sent to the C/A in L.A, was misrouted to CA2/6 in Ventura.
Jul 5 2002	Note:   $200 check returned to Mullen & Henzell.
Jul 8 2002	Reply brief filed (case fully briefed)   with permission
Jul 29 2002	Received application to file amicus curiae brief; with brief   IBEW Trusts and Laborers Trusts supports Applnt R. Betancourt [ App. & Brf. under same cover]
Jul 31 2002	Request for extension of time filed   by Carpenters Southern California Administrative Corporation for a 30-day extension to 9/6/2002 to file the application for permission to file amicus brief and brief in support of appellants.
Jul 31 2002	Received:   application for extension of time for Carpenters So. Calif. Admin. Corp. to file A.C. Brief supporting appellants R. Betahcourt asking to Sept 6,2002.
Aug 2 2002	Note:   Order prepared - permission to file amicus application and brief of Ibew Trusts and Laborers Trusts in support of defendants and respondents.
Aug 2 2002	Permission to file amicus curiae brief granted   The application of Carpenters Southern California Administrative Corporation in support of appellants is granted. The brief shall be served and filed on or before September 6, 2002. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Aug 2 2002	Permission to file amicus curiae brief granted   Ibew Trusts and Laborers Trusts in support of respondents. Answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Aug 2 2002	Amicus Curiae Brief filed by:   Ibew Trusts and Laborers Trusts in support of respondents.
Sep 6 2002	Amicus Curiae Brief filed by:   Carpenters Southern California Adminstration Corporation supports appellants.
Jan 31 2003	Change of Address filed for:   counsel for amicus curiae IBEW-NECA
Aug 28 2003	Case ordered on calendar   10-09-03, 9am, L.A.
Sep 9 2003	Filed:   request to divide argument time w/resps R. Betancourt, etal by amici Trustees of Southern California IBEW-NECA Pension Trust, etal
Sep 19 2003	Order filed   permission granted for two counsel to argue on behalf of aplts
Sep 19 2003	Order filed   Permission granted for aplts to allocate 10 min of oral argument time to A/C IBEW Trusts and Laborers Trusts.
Oct 9 2003	Cause argued and submitted
Dec 15 2003	Opinion filed: Judgment affirmed in full   Court of Appeal's judgment. Opinion by: Chin, J. -- Joined by George, C. J., Kennard, Baxter, Werdegar, Brown, Moreno, JJ.
Jan 15 2004	Remittitur issued (civil case)
Jan 28 2004	Received:   Receipt for remittitur from Second District, Division Six.

Briefs
May 10 2002	Opening brief on the merits filed
Jun 10 2002	Answer brief on the merits filed
Jul 8 2002	Reply brief filed (case fully briefed)
Aug 2 2002	Amicus Curiae Brief filed by:
Sep 6 2002	Amicus Curiae Brief filed by:

If you'd like to submit a brief document to be included for this opinion, please submit an e-mail to the SCOCAL website