BankAmerica Pension Plan v. McMath, 206 F.3d 821 (9^th Cir. 2000)-The court decided whether ERISA preempts the doctrine of "substantial compliance".  The dispute concerned the identity of the proper beneficiaries of Clarence Montgomery's 401(k) Plan. In 1990, Mr. Montgomery designated his mother, father, and sister as primary beneficiaries.  In 1996, someone submitted an unsigned beneficiary form naming Mr. McMath as the primary beneficiary (and Alva Montgomery, Clarence's mother, as secondary beneficiary.)  The Plan accepted the form, failing to notice that Mr. Montgomery did not sign it.

            The BankAmerica Plan brought an interpleader action to determine the proper beneficiaries.  Mr. Montgomery's mother and sister appealed the district court's summary judgment in favor of Mr. McMath.  "In determining that the fiduciary had not abused its discretion, the district court found that: (1) ERISA preempted the state doctrine of substantial compliance; (2) a federal common law doctrine of substantial compliance applied; and (3) under the federal common law doctrine of substantial compliance Mr. Montgomery effectively designated Mr. McMath as his beneficiary."

After reviewing preemption law, this court found that ERISA did not preempt the state law doctrine of substantial compliance.  The doctrine neither "relates to" nor has "connection with" an ERISA plan.  The court reasoned that the doctrine would not frustrate any of ERISA's objectives.  It would not modify or affect the administration of the plan, but would merely affect the "ultimate ownership of benefits."  See Emard v. Hughes Aircraft Co., 153 F.3d 949, 957 (9^th Cir. 1998). 

Since there was no preemption, this court applied California’s "substantial compliance" law, holding that the unsigned form did not substantially comply.  In California cases, the courts have applied the doctrine to protect insureds from an insurer's bureaucratic negligence, not from their own failure.  Here, the onus was on Mr. Montgomery to sign the form.