In the case of Pilot Life Insurance Co. v. Dedeaux, 1986, the U.S Supreme Court ruled in favor of Pilot Life Insurance Company by a vote of 7-2. The issue at hand was whether state law claims for wrongful termination of benefits and breach of fiduciary duty were precluded by the Employee Retirement Income Security Act (ERISA). Claude C. Dedeaux had been injured on his job and received disability payments from Pilot Life under an employee welfare benefit plan until they were terminated in 1975. He then sued claiming that he was wrongfully denied further benefits and that there was a breach in fiduciary duties owed to him under Mississippi common law tort and contract theories as well as statutory bad faith claim handling practices prohibited by Mississippi's Unfair Trade Practices Act. The court held that ERISA’s civil enforcement provisions are exclusive remedies for participants or beneficiaries who allege improper processing of claims for benefits, thus preempting any state-law cause action based on such allegations.

The dissenting opinion in the case of Pilot Life Insurance Co. v. Dedeaux argued that the majority's interpretation of ERISA (Employee Retirement Income Security Act) was too broad and would effectively preempt any state law claims related to an employee benefit plan, even if those claims were not directly connected to the administration or management of such a plan. The dissent believed this approach contradicted Congress' intent when it enacted ERISA, which was primarily concerned with regulating how these plans are managed rather than eliminating all possible state-law remedies for employees who suffer harm as a result of decisions made by their employers or insurance companies regarding benefits. They also pointed out that under this interpretation, an insurer could act in bad faith without fear of being held accountable under state laws designed to protect consumers from such behavior.