On July 29, 2013, a federal district court in Pennsylvania issued an order affirming that the U.S. Supreme Court’s decision in United States v. Windsor requires the recognition of same-gender marriage with regard to benefits distributable from an ERISA-covered employee benefits plan. (For a link to the memorandum related to the order, click here).
In the case, O’Connor v. Tobits, the District Court for the Eastern District of Pennsylvania was presented a very narrow issue to decide: “whether the United States Supreme Court’s decision in United States v. Windsor, declaring Section 3 of the Defense of Marriage Act unconstitutional as a deprivation of the equal liberty of persons that is protected by the Fifth Amendment, requires recognition of a valid Canadian same-sex marriage for purposes of benefits distribution pursuant to ERISA, a federal statute.”
The facts in the case are straightforward. Sarah Ellyn Farley (the decedent) lived in Illinois, worked for a Philadelphia-based law firm, and participated in the law firm’s profit sharing plan. Farley and Jean Tobits were married in Canada. (Illinois recognizes out-of-state same-gender marriages as civil unions.)
Farley died from cancer prior to officially designating Tobits as beneficiary of the plan’s pre-retirement death benefit. Tobits made a claim for the death benefits as Farley’s “surviving spouse.” Farley’s parents submitted a competing claim for the benefits, asserting that because Pennsylvania does not recognize same-gender marriages, Tobits could not be their daughter’s “surviving spouse.” The law firm “interpleaded” the competing claims into the court for it to decide who is entitled to the payment of the plan’s death benefits.
After analyzing the terms of the plan, the Windsor decision and ERISA, the court held that, “Windsor makes clear that where a state has recognized a marriage as valid, the United States Constitution requires that the federal laws and regulations of this country acknowledge that marriage.” This finding alone, the court added, “is dispositive of the issue of the proper recipient of Ms. Farley’s death benefits.”
Most interesting, though, was what the court said in footnote 28 of its memorandum:
The Court need not decide any issues of Pennsylvania state law in this matter, including that of the constitutionality of Pennsylvania’s state DOMA statute. Although the Plan contains a choice of law provision that makes reference to Pennsylvania law, by the Plan’s terms, Pennsylvania law is only applicable to the extent it is not pre-empted by ERISA. Here, the Court finds that, based on the terms of this Plan, ERISA pre-empts Pennsylvania law entirely.
That this Plan belongs to a company headquartered in Pennsylvania matters not. The issue here regards the definition of “Spouse” as supplied by ERISA — a federal regulation. For the purposes of determining the definition of “Spouse,” if Courts were required to look at the state in which the policy was drafted, this could permit Plan administrators and drafters to forum shop among those jurisdictions with state DOMA statutes, in an effort to avoid providing benefits to same-sex couples with otherwise valid marriages. At its heart, ERISA was enacted to establish national uniformity among benefit plans. 120 CONG. REC. 29,197 (1974) (“With the preemption of the field, we round out the protection afforded participants by eliminating the threat of conflicting and inconsistent State and local regulation.”); see also Aetna Health Inc. v. Davila, 542 U.S. 200, 208, (2004). Today’s decision is consistent with that goal.
While it is not clear whether a federal district court in another state will come to the same conclusion (for example, in a situation where the couple were married in Canada, but worked and lived in a state that does not recognize same-gender marriages — even as civil unions), it is helpful to know that at least one federal district court judge agrees with the notion that we need “national uniformity among benefit plans” when it comes to the definition of “spouse” and “surviving spouse.” Only time will tell how this issue will ultimately be resolved.
Ronald J. Triche, APM, is ASPPA’s Assistant General Counsel and Director of Government Affairs.
