July 16, 1996
No. 94-30178, Boggs v. Boggs
WIENER, Circuit Judge, with whom POLITZ, Chief Judge, KING,
BENAVIDES, STEWART and PARKER, Circuit Judges, join, dissenting
from failure to grant rehearing en banc.
My concerns about the panel majority opinion in this case
prompted me to request a poll of the active judges of this court to
rehear the case en banc. In the ensuing poll, less than a majority
of the judges voted to rehear the case. With the utmost respect,
I dissent from the refusal of a majority of the active judges of
this court to rehear this case en banc.
I
WHY EN BANC?
The instant appeal forces us to come to grips with the
conundrum that results when the irresistible force of ERISA,1
particularly its preemption and anti-alienation provisions, meets
the immovable object of a state's community property regime,
particularly its immediate vesting and assignability provisions.
The panel opinion held that the force of ERISA could not budge
Louisiana’s community property regime; and in so holding created a
circuit split with the “other” majority community property
circuit.2 Despite the split thus created, the monumental and
1
Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1001 et seq.
2
See Ablamis v. Roper, 937 F.2d 1450 (9th Cir. 1991). The
Ninth Circuit includes the community property states of Arizona,
California, Idaho, Nevada, and Washington. In substantially
similar circumstances, the Department of Labor also has concluded
that ERISA mandates preemption. DOL Advisory Opinion # 90-46A
(December 4, 1990).
pervasive effect on the great majority of the residents of this
circuit, and the 2-to-1 division of the panel that heard this
appeal, this court refused to rehear the panel opinion en banc. I
write separately not only to voice my disappointment with that
failure of the entire court to consider such an important appeal,
but also to address the merits of this issue of great consequence.
Recognizing that employee benefit plans affect “the continued
well-being and security of millions of employees and their
dependents,”3 Congress enacted the unique and highly pervasive
Employee Income Retirement Security Act (ERISA) in 1974, thus
making the regulation and administration of non-governmental
retirement and benefit plans an exclusively federal concern.
Today, over twenty years later, the preeminence and importance of
pension plans and welfare benefit plans in the lives of most
Americans has grown exponentially. With their combined assets
totaling over 4.7 trillion dollars, employee benefit plans cover an
estimated 54 million employees.4 In addition to its economic
significance, this landmark legislation plays a dominant role in
present-day federal jurisprudence as reflected, for example, by the
unusually high number of ERISA cases for which the Supreme Court
has granted writs in recent years.5 In sum, ERISA and employee
3
29 U.S.C. § 1001(a).
4
U.S. DEP’T OF COMMERCE, BUREAU OF THE CENSUS, STATISTICAL ABSTRACT OF
THE UNITED STATES at 383, 535 (115th ed. 1995).
5
E.g., Lockheed Corp. v. Spink, 116 S. Ct. 1783 (1996);
Varity Corp. v. Howe, 116 S. Ct. 1065 (1996); Peacock v. Thomas,
116 S. Ct. 862 (1996); New York Conference of Blue Cross & Blue
Shield Plans v. Travelers Ins. Co., 115 S. Ct. 1671 (1995);
2
benefit plans are ubiquitous and integral parts of our society.
Within the foregoing framework, the following two factors were
urged by the panel majority as reasons why this case should not be
voted en banc: (1) the parties themselves had not filed a motion
for panel rehearing or suggestion for rehearing en banc, and (2)
the arguments that I presented in favor of ERISA preemption are not
the arguments that were presented to the district court or to the
panel. In this instance, I find those reasons wholly
unpersuasive.6 Moreover, they obscure the fact that this case
presents an issue of critical and continuing importance to both
temporary and permanent residents — past, present, and future — of
all community property states, a category comprising the two most
populous states of this circuit.7 Not only is this issue one of
legal primacy, it literally touches the pocketbooks of hundreds of
thousands if not millions of plan participants and their spouses
during their retirement years. In addition to creating a circuit
Curtiss-Wright Corp. v. Schoonejongen, 115 S. Ct. 1223 (1995).
6
First, we cannot tell why the appellant has not asked for
panel or en banc rehearing: It may be economics, it may be
personal, it may be tactical, etc. Regardless of the reason, such
inaction by the parties should not here control our determination
to rehear a case of this importance. Second, my argument favoring
rehearing this case en banc and the analysis that follows, focuses
on the legal interpretation of ERISA’s preemption and spendthrift
provisions. These are issues and they have been briefed by both
parties; they are not “new” issues. Moreover, to the extent that
any of my arguments discuss new theories which should not be
entertained — a proposition with which I disagree — these arguments
are merely “belt and suspenders” support for the parties’ arguments
on the same issues that are and have been squarely before this
court.
7
Both Texas and Louisiana are community property states.
3
split, the panel opinion has all the “bombshell” potential of
making an earth-shaking impact on an area of the law as pervasive
as ERISA in general and pensions in particular. A case of this
magnitude should bear the imprimatur of the entire court, even if
the en banc court were ultimately to reach the same result as has
the panel.
II
THE MERITS
I do not suggest that the substantive issues of this case are
easy ones. Indeed, in addition to an understanding of the
complexities of ERISA, an understanding of the nature of retirement
plans, particularly defined benefit plans, is crucial. To begin
with, it is axiomatic that there can be no rights greater than
those created by the retirement plan, the contents of which, for
ERISA plans, is largely dictated by that statute. That the panel
majority “granted” to the heirs of the predeceased first spouse an
interest in the survivor annuity of the second spouse — despite the
undeniable fact that this survivor annuity never even came into
existence during the lifetime of the first spouse, but only upon
her widower’s re-marriage — may suggest that proper consideration
has not been given to the nature of pensions in general or to the
Bell Plan itself.
It is equally axiomatic that this appeal requires a keen
understanding of the law of ERISA. As this court could not duck
the core issue of preemption which lies at the busy intersection
4
where ERISA and community property law collide, I would have had us
conclude that the length and breadth of the preemption mantle in
which Congress has cloaked ERISA gives it the right-of-way. More
specifically, I would have had our court hold that ERISA preempts
Louisiana community property law to the extent that such law would
purport to recognize and enforce an interest of the heirs or
legatees of a deceased nonparticipant spouse as to her "community
interest" in an ERISA-qualified pension plan. As explained more
fully below, I believe that this conclusion is compelled by the
mandate of the federal statute, the intent of Congress, and the
purposes and structure of ERISA, not the least of which is the
requirement of national uniformity of such pension plans in the
private sector of our national economy. Furthermore, that the
state law claims in this case have been brought against the
beneficiaries of the plan, as opposed to the plan itself or the
plan’s fiduciary, in no way circumvents or defeats ERISA’s potent
preemptive force.
A
FACTS AND PROCEEDINGS
Isaac Boggs (Participant) was employed by South Central Bell
from June 18, 1949, until his retirement on September 1, 1985, and
participated in an ERISA-qualified pension plan (the Bell Plan).
Participant was already married to Dorothy Boggs (First Spouse)
when he went to work for South Central Bell. Their marriage lasted
until her death, which occurred some six years prior to his
retirement. At all relevant times their Louisiana marital property
5
regime was one of community property. Three sons of that
marriageSQDavid Bruce Boggs, Thomas Frank Boggs, and Harry Maurice
Boggs (the Sons), Defendants-Appellees hereinSQsurvived both of
their parents.
When First Spouse died, her estate included an undivided one-
half interest in all property belonging to the community of acquets
and gains theretofore existing between her and Participant (the
community). By testament, First Spouse left one-third (1/3) of her
estate to Participant outright and confirmed to him for his
lifetime the usufruct8 of the surviving spouse in the remaining
two-thirds (2/3) of her estate. She left to the Sons the naked
ownership9 of the two-thirds share of her estate that she burdened
with Participant's usufruct.
Among the assets inventoried in the judicial administration of
First Spouse's succession was a one-half (½) community interest in
Participant's account in the Bell Plan. As the balance of his
account was valued at $42,388.57, her community half interest was
listed in her succession at $21,194.29.
Within a year after the death of his First Spouse, Participant
remarried. His second and final marriage was to Plaintiff-
Appellant Sandra Jean Dale Boggs (Surviving Spouse), to whom he was
married and with whom he was residing at the time of his death in
1989.
8
Roughly the equivalent of a common law life estate.
9
Roughly the equivalent of a common law remainder interest.
6
The Bell Plan provided several types of retirement benefits to
Participant. The first benefit that he received on retirement was
a lump sum payment of $151,628.94, which he "rolled over" into an
Individual Retirement Account (IRA). It was worth $180,778.05 at
his death. Participant's second retirement benefit was a pension
annuity, which provided monthly payments of $1,777.67 until his
death, then converted automatically to a survivor's annuity in
favor of Surviving Spouse. That annuity continues to provide
monthly payments to her and is scheduled to do so for her lifetime.
The third benefit that Participant received on retirement consisted
of 96 shares of AT&T stock and a life insurance policy in which
Surviving Spouse was designated as the beneficiary. The fact that
all relevant employee benefit plans of South Central Bell are ERISA
plans is undisputed.
Some time after Participant's death in 1989, the Sons filed an
action in state court seeking an accounting on the usufruct that
their mother had confirmed to Participant in her testament, as well
as a judgment awarding them a portion of his retirement benefits.
Of particular significance to this appeal is the fact that the Sons
have claimed an ownership interest in past and future annuity
payments to Surviving Spouse.
In response to the Sons’ state court action, Surviving Spouse
filed this suit in district court seeking a declaratory judgment
that ERISA preempts the Sons' Louisiana community property claims
to the extent that they purport to affect either past or future
retirement benefits received or to be received by Participant or by
7
Surviving Spouse under the Bell Plan. Specifically, Surviving
Spouse asserted that ERISA alone governs the entitlement to and
payment of benefits under the Bell Plan, and that under ERISA rules
she is the designated beneficiary. The Sons countered, insisting
that this case is not controlled by ERISA, as a consequence of
which the district court lacked jurisdiction. The Sons argued
alternatively that ERISA does not preempt any of the aspects of
Louisiana community property law that are at issue in this case.
As a preliminary matter, the district court determined that it
did have jurisdiction by virtue of 29 U.S.C. § 1132. Proceeding to
the merits, the district court rejected the contentions of
Surviving Spouse that ERISA preempts the applicable provisions of
Louisiana community property law, and denied her the declaratory
judgment she sought. On appeal Surviving Spouse asked this court
to review and then reverse that decision. Two of the three judges
on the panel that heard the appeal of that ruling affirmed it, and
I provoked an en banc poll in which a majority of my colleagues
voted against rehearing. It is from that vote that I respectfully
dissent.
B
ANALYSIS
I have no quarrel with the district court’s ruling on
jurisdiction or with the panel’s affirmance thereof. I therefore
proceed directly to the substantive issues of the case. Surviving
Spouse sought a declaratory judgment that ERISA’s preemption and
its anti-alienation rules trump any state cause of action that
8
would recognize an interest of the heirs or legatees of the
predeceased nonparticipant spouse in any retirement benefits under
an ERISA plan when the basis of the claims of the heirs or legatees
is the purported "alienation" —— here, a testamentary transfer ——
of such nonparticipant spouse's putative community property
interest in those plan benefits. The district court found no ERISA
preemption and rejected the arguments of the Surviving Spouse. On
appeal, she asked this court to revisit the preemption issue and
reverse the district court. I shall review the district court's
preemption analysis de novo,10 examining briefly the pertinent
aspects of Louisiana's community property regime and then, in
greater detail, the pertinent aspects of ERISA.11
1. Community Property Rights
Louisiana's community property system recognizes the
contribution made by each spouse, employed or unemployed, to the
marriage and to the acquisition of marital property. Under
10
Hook v. Morrison Milling Co., 38 F.3d 776, 780 (5th Cir.
1994).
11
My analysis focuses solely on the preemption of state law
as it applies to ERISA-covered pension plans. As noted above,
Participant “rolled over” a portion of his benefits into an IRA.
An IRA, of course, is not an ERISA-covered pension plan. It is
worth pointing out, however, that at First Spouse’s date of death,
none of the benefits had been “rolled over”; all were still held by
the trusts that were ERISA-covered pension plans. For me, this
fact is reason enough to conclude that the benefits which were
eventually “rolled over” are not excepted from my preemption
analysis. Neither the district court nor the panel majority,
however, addressed this issue. Also not addressed were the nature
and the terms of the plan from which these “rolled over” benefits
were received. My conclusion in favor of preemption, however, in
no way depends on the type of ERISA-covered pension plan involved
(e.g., defined benefit plan, profit sharing plan, etc.) or on its
particular terms.
9
Louisiana community property law, each spouse owns "a present
undivided one-half interest" in each community asset, which
interest vests from the moment the asset is acquired.12 Louisiana
law provides that, at the termination of the community property
regime, each spouse owes to the other spouse (or, when the
community is terminated by the death of the spouse, to his or her
heirs or legatees) an accounting for community property under his
or her control.13 Generally, retirement benefits acquired during
the existence of the community are considered by Louisiana law to
be community assets.14
2. ERISA - The Statute
Perhaps the most novel and pervasive private civil legislation
enacted by Congress in the last quarter century, ERISA is a
comprehensive statute which uniquely is co-administered by two
departments of the federal government15 and is designed to protect
the interests of participating employees and their dependents in
nongovernmental employee benefit plans.16 Congress adopted ERISA
for the twin purposes of establishing national uniformity in
employee benefit law and safeguarding retirement benefits.17 A
fundamental tenet of ERISA is that retirement benefits are
12
Hare v. Hodgins, 586 So.2d 118, 122 (La. 1991).
13
See La. Civ. Code Ann. art. 2369.
14
Hare v. Hodgins, 586 So.2d 118, 122 (La. 1991).
15
Department of the Treasury and Department of Labor.
16
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137 (1990).
17
Shaw v. Delta Air Lines, 463 U.S. 85, 90-91 (1983).
10
protected to assure delivery of retirement income to participants
and their dependents.18 The overarching device that Congress wrote
into ERISA as an all-encompassing umbrella to protect the operable
provisions of the Act, and as the principal mechanism to ensure
enforcement of those provisions, is preemption: supersedure of any
state law related to an employee benefit plan.19
3. Preemption
Whether a particular state action is preempted by some federal
law is always a question of Congressional intent.20 "The purpose
of Congress is the ultimate touchstone."21 In divining
Congressional intent, the starting point is an examination of the
explicit statutory language and the structure and purpose of the
statute.22 Before embarking on that examination, though, I note at
the outset, as did the panel majority, that domestic relations law
has long been recognized as the domain of the states. The Supreme
Court has acknowledged that "[s]tate family and family-property law
must do 'major damage' to 'clear and substantial' federal interests
18
See 29 U.S.C. § 1001b(a)(2)("The Congress finds that the
continued well-being and retirement income security of millions of
workers, retirees, and their dependents are directly affected by
such plans."); Guidry v. Sheet Metal Workers Nat'l Pension Fund,
493 U.S. 365, 376 (1990) (noting that the decision to safeguard a
stream of income for pensioners and their dependents is a
considered congressional policy choice).
19
29 U.S.C. § 1144(a).
20
Ingersoll-Rand, 498 U.S. at 137-38.
21
Id. at 138 (quoting Allis-Chalmers Corp. v. Lueck, 471 U.S.
202, 208 (1985)).
22
FMC Corp. v. Holliday, 498 U.S. 52, 58 (1990).
11
before the Supremacy Clause will demand that the state law be
overridden."23 This has never meant, however, that domestic
relation laws are wholly immune from federal preemption; moreover,
"[t]he relative importance to the State of its own law is not
material when there is a conflict with a valid federal law, for the
Framers of our Constitution provided that the federal law must
prevail."24 Nevertheless, for purposes of this preemption analysis,
I assume without granting that the most deferential standard is
applicable and proceed accordingly.25
Section 514(a) of ERISA26 declares universally that ERISA shall
"supersede any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan described in
23
McCarty v. McCarty, 453 U.S. 210, 220 (1981) (quoting
Hisquierdo v. Hisquierdo, 439 U.S. 572, 581 (1979)).
24
Ridgway v. Ridgway, 454 U.S. 46, 54-55 (1981).
25
This deference accorded the states in the area of domestic
relation law is usually applicable in the context of resolving a
direct conflict between federal and state law rather than in a case
implicating statutory preemption, such as ERISA's express
preemption provision. Within this framework I nevertheless discern
a distinction between community property law on the one handSQwhich
is at least as much "property" law as it is "domestic relations"
lawSQand, on the other hand, those state laws that govern purely
interspousal aspects of domestic relations, such as marriage,
separation, divorce, dower, curtesy, alimony, support of
dependents, and the like. Thus I recognize the argument that,
unlike the more purely status-related domestic relations laws,
community property laws are fair game for ERISA and its preemption.
The discussion infra of REA and its crown jewel, the QDRO,
demonstrates beyond cavil that Congress too saw community property
as fair game.
26
29 U.S.C. § 1144(a).
12
section 4(a) and not exempt under section 4(b)."27 Courts have
interpreted § 514(a) most broadly, observing that its deliberately
expansive language was designed "to establish pension plan
regulation as exclusively a federal concern."28
The Supreme Court has given the phrase "relate to" a "broad
common-sense meaning."29 A state law relates to an ERISA plan "in
the normal sense of the phrase if it has connection with or
reference to such a plan."30 A state law can relate to an ERISA
plan even if that law was not specifically designed to affect such
plans, and even if its effect is only indirect.31 The Supreme Court
has held a state law claim to be preempted when it was "premised
on" the mere existence of an ERISA plan.32
Nevertheless, ERISA preemption is not wholly devoid of outer
limits. The Supreme Court has cautioned 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'
27
Id. (emphasis added). Section 4(b) exemption is not
implicated in this case.
28
Ingersoll-Rand, 498 U.S. at 138 (internal quotations and
citations omitted).
29
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47 (1987).
30
Shaw, 463 U.S. at 96-97.
31
Rozzell v. Security Services, Inc., 38 F.3d 819, 821 (5th
Cir. 1994) (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41
(1987)).
32
District of Columbia v. Greater Washington Bd. of Trade,
506 U.S. 125, 131 (1992) (citing Ingersoll-Rand, 498 U.S. at 140).
13
the plan."33
So, even though the borderlines that define those outer limits
are not bright, the Court has shown us the approximate boundaries
of the wide band within which a state law may fall and still be
preempted by ERISA: As long as there is some relationship between
the effect of a state law and an ERISA plan, the state law can be
said to relate to such plan and therefore be preempted; only if
that relationship is so tenuous, remote or peripheral as to eschew
any meaningful nexus with the ERISA plan will preemption be
avoided. Even if the asserted effect of state law is premised on
nothing more than the mere existence vel non of an ERISA plan, or
was not overtly intended to affect such plans and only does so
indirectly, ERISA will nevertheless preempt.34 It is in this
perspective of extreme (but not totally unlimited) ubiquity that I
proceed to examine the state laws here at issue to see if they are
sufficiently related to the Bell Plan to be preempted.
33
Shaw, 403 U.S. at 100 n.21, 103 S.Ct. at 2901, n.21.
34
As an aid in the preemption inquiry, this court has noted
that preemption of a state law claim is more likely to be found if
"(1) the claim addresses areas of exclusive federal concern, such
as the right to receive benefits under the terms of an ERISA plan,
and (2) the claim directly affects the relationship among the
traditional ERISA entities (i.e., plan administrators/fiduciaries
and plan participants/beneficiaries)." Hook v. Morrison Milling
Co., 38 F.3d 776, 781 (5th Cir. 1994); see Sommers Drug Stores Co.
v. Corrigan Enterprises, Inc., 793 F.2d 1456, 1467 (5th Cir. 1986).
These factors appear to be the result of an attempt at distilling
prior case law. See Sommers, 793 F.2d at 1467. Useful in some
circumstances, it can be no substitute for an independent analysis
of the issue presented. Although I believe a conclusion that ERISA
preemption applies in this case could be reached using the factors
above, the unique issue presented is best analyzed by examining the
structure and purpose of the statute and Congressional intent on
this point, the "ultimate touchstone" in determining preemption.
14
a. Application of ERISA Preemption
The essence of the Sons' state action is a determination of
the ownership of and entitlement to retirement benefits under an
ERISA pension plan, the Bell Plan. Thus, the Sons’ claims are
necessarily premised on the very existence vel non of the Bell
Plan.35 The result sought by the Sons would effectively alter the
Participant's beneficiary designation under the plan.36
The fact that the precipitating state court action happened
to have been brought against the beneficiary only and not directly
against the plan administrator does not immunize it from
preemption. ERISA's broad preemption mandate is not nearly so
limited: The indirect but palpable effect that the result sought
by the Sons would have on the instant ERISA plan is none the less
proscribed.37
As proof positive of a sufficient nexus between the Plan and
35
See Ingersoll-Rand, 498 U.S. at 140.
36
See Moore v. Philip Morris Cos., Inc., 8 F.3d 335, 340 (6th
Cir. 1993) (state law that affects eligibility for plan benefits
"relates to" the plan for preemption purposes); Brown v.
Connecticut General Life Ins. Co., 934 F.2d 1193, 1195 (11th Cir.
1991) (state law determination of beneficiary of life insurance
policy "relates to" an ERISA-covered employee benefit plan);
Shiffler v. Equitable Life Assurance Soc'y, 838 F.2d 78, 81-82 (3d
Cir. 1988) ("Thus while [the plaintiff] would have us consider her
claims as setting forth state common law causes of action, clearly
they 'relate to' the employee benefit plans when that phrase is
given its broad common sense meaning, for no matter how her action
is characterized her goal was to recover the proceeds claimed under
the [plan].").
37
See Meeks v. Tullis, 791 F.Supp. 154, 157 (W.D. La. 1992)
(holding that a claim by the heirs of a nonparticipant spouse
against non-ERISA assets for the value of the community property
interest is preempted by ERISA).
15
the state law at issue, one need only observe, for example, that
any calculation of the benefits claimed by the Sons would
unquestionably require an analysis of the terms and conditions of
the Bell Plan, as well as its records and those of its
participants.38 Moreover, plan administrators would be forced to
take burdensome precautions to protect the rights and interests in
plan benefits not only of the beneficiary but of the heirs and
legatees as well.
In the context of national uniformity, the imposition of such
additional duties, responsibilities, and liabilities on thousands
of ERISA retirement plans and their fiduciaries would implicate
different rules for each state in which one or more participants
reside, thereby creating a polyglot nightmare of administration.
Obviously, the pertinent provisions of those state property laws
would have a material effect on employee retirement plans. Surely,
their effect cannot be said to be "too tenuous, remote, or
peripheral" to exempt those laws from ERISA's statutory preemption.
And, though ERISA does expressly provide some statutory
exceptions to its preemption provisions, the Sons do not argue that
any are applicable here; and I have found none on my own. As
discussed more fully below, the Qualified Domestic Relations Order
(QDRO) exception has not been satisfied; and the fact that Congress
created other exceptions in other areas of the Act but provided
38
See Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1294 (5th
Cir. 1989) (holding that a state contract claim was "related to" an
employee benefit plan and thus preempted when the court must refer
to the pension plan to compute the damages sought, which were equal
to the benefits he would have received under the plan).
16
none here is at least persuasive evidence that none was intended.
I therefore harbor no reservations in concluding that the
Sons' putative state causes of action are related to the ERISA-
covered Bell Plan and are therefore preempted by ERISA. I submit
that the discussion which follows confirms that this conclusion is
compatible with —— more accurately, mandated by —— Congressional
intent and the purposes of ERISA, and demonstrates that, unless
preempted, the states’ laws in question would do "major damage" to
the clear and substantial federal interests embodied in ERISA.
b. Purposes and Structure of ERISA
Not only do the causes of action proffered by the Sons come
within the liberal scope of the preemption statute under the
"related to" test, but a conclusion sustaining preemption comports
with the intent of Congress, the "ultimate touchstone"39 in
determining preemption. This intent is manifest in the structure
and announced purposes of ERISA and is underscored by REA.40
(i) Ensuring Retirement Income
Congress enacted ERISA to protect retirement benefits as a
means of assuring receipt of retirement income by employees and
their dependents. Conversely, nowhere in ERISA can the securing of
inheritances by or legacies to the heirs or legatees of a
participant employee or a nonparticipant spouse be identified as
anything but antithetical to this purpose. In fact, allowing the
39
Ingersoll-Rand, 498 U.S. at 138.
40
Retirement Equity Act of 1984, Pub. L. No. 98-397, 98 Stat.
1426.
17
heirs of a nonparticipant spouse to claim plan benefits ——
particularly when doing so violates the congressionally decreed
hierarchy of recipients, at the pinnacle of which stands the
surviving spouseSQwould directly undercut the statute's express
purpose of ensuring that retirement income reaches participating
employees and their dependents.
(ii) Uniformity
The other of ERISA's twin purposes —— national uniformity41 ——
would be frustrated if heirs and legatees were allowed to prevail
under state laws that would produce results different from those
produced by ERISA's rules governing entitlement to and distribution
of benefits. Even though the structures of the various states'
community property laws are generally similar, each community
property state has its own unique set of specific rules affecting
ownership and management of such property, including some notable
differences from state to state.42 Moreover, all community property
rules differ substantially from the concomitant rules of non-
community states. As already noted, allowing these disparate laws
to trump ERISA could not help but have a materially adverse impact
on plan administration as well. Unavoidably, the amount of
retirement income available for each participant in a given plan
would vary depending solely on the serendipity of a participant's
41
See Ingersoll-Rand, 498 U.S. at 137.
42
For example, in some states the income from separate
property, such as retirement benefits acquired before marriage, is
separate property, and in other states income from separate
property becomes community property.
18
state of residence from time to time. A domiciliary history of
moving in and out of community property jurisdictions would create
an impossible accounting and allocation problem. Quite simply,
ERISA's goal of uniformity would be unattainable if the ultimate
enjoyment of ERISA plan benefits were left to the vicissitudes of
the varying and disparate marital property laws of the several
states, be they community or separate.
c. Retirement Equity Act of 1984 (REA)43
Perhaps nothing argues more convincingly for the conclusion I
here advocate than the congressional intent manifested when ERISA
was amended in 1984 by the enactment of REA.44 As originally
adopted, ERISA failed to express with sufficient clarity the nature
and extent of the interest of a nonparticipant spouse in the
participant spouse's ERISA-covered retirement plan. After ERISA
had been on the books for a decade, Congress comprehensively
amended and supplemented it with REA. One of the express purposes
of REA was to confirm the importance of the financial security of
the nonparticipant spouse and to safeguard his or her interest from
43
Pub. L. No. 98-397, 98 Stat. 1426.
44
I do not imply that REA is necessarily applicable to the
instant case; only that it serves to remove doubt about the intent
and purpose of Congress regarding the interplay of community
property rules and ERISA, and the dominance of the latter when they
conflict. The district court, however, expressly indicated that
REA supported its holding. Moreover, even though the panel
majority opinion did not expressly address REA, its holdings leave
little doubt that its decision will be binding on cases in which no
uncertainty exists that REA controls. It is important to note,
however, that even in the instant case, there can be no question
that the rights of Surviving Spouse, not the Sons, are protected by
REA.
19
the havoc that could be visited on it by the death of or divorce
from the participant spouse.45 The primary way that REA achieves
these intended results is by (1) inventing the QDRO as the oneSQbut
only oneSQmechanism for allocating plan benefits between spouses,46
and (2) mandating that ERISA pension plans include automatic
survivor benefits in favor of the nonparticipant spouse.47
Significant to the instant case is the widely recognized fact
that a central impetus to Congress's adoption of REA was the
burgeoning body of conflicting jurisprudence addressing spousal
rights in plans and plan benefits, particularly under community
property regimes. During the ten years of ERISA’s existence that
preceded REA, disagreements developed among the various courts as
to whether ERISA preempted state community property law claims to
the extent that such laws related to the respective rights of the
participant and nonparticipant spouses in and to benefits under
ERISA plans.48 REA deliberatelySQand, I believe,
definitivelySQsettled the issue by creating the QDRO and making it
the one and only mechanism by which, inter alia, a nonparticipant
spouse's community interest in an ERISA plan can be recognized in
45
Ablamis v. Roper, 937 F.2d 1450, 1453 (9th Cir. 1991).
46
See 29 U.S.C. §§ 1056(d)(3), 1144(b)(7).
47
29 U.S.C. § 1055. The nonparticipant spouse can consent
to waive this right if done in writing.
48
Compare Stone v. Stone, 663 F.2d 740 (9th Cir. 1980)
(holding that spousal community property rights on divorce were not
preempted) with Francis v. United Technology Corp., 458 F.Supp. 84
(N.D. Cal. 1978) (holding that ERISA preemption prevents the
application of state community property law permitting attachment
of plan benefits for family support purposes).
20
law.49 I think that in the instant case the district court fell
into the same trap that a number of other courts have fallen into
since 198450SQciting and relying on now-obsolete pre-REA case law in
a post-REA worldSQto support their erroneous conclusions that ERISA
does not preempt causes of action of the nature instituted here by
the Sons.51 It seems unavoidable to me, though, that the passage
49
A QDRO is any judgment, decree, or order made pursuant to
a state domestic relations law (including community property) which
(1) "creates or recognizes the existence of an alternate payee's
right to, or assigns to an alternate payee the right to, receive
all or a portion of the benefits payable with respect to a
participant under a plan," and (2) "relates to the provision of
child support, alimony payments, or marital property rights to a
spouse, former spouse, child, or other dependent of a participant."
29 U.S.C. § 1056(d)(3)(B).
50
See, e.g., Ablamis v. Roper, 937 F.2d 1450 (9th Cir. 1991)
(Fletcher, J., dissenting).
51
For example, the district court cites Hisquierdo v.
Hisquierdo, 439 U.S. 572 (1979), a case in which the Supreme Court
held that federal law preempted division of benefits under the
Railroad Retirement Act pursuant to community property laws. The
Boggs district court relied on the statement in Hisquierdo that
"[d]ifferent considerations might well apply where Congress has
remained silent on the subject of benefits for spouses," and cited
ERISA. In addition to the fact that this statement is dicta, this
rationale is unpersuasive because, after the enactment of REA,
Congress can no longer be said to have remained silent on the
subject of benefits for spouses.
The Boggs district court also relied on Carpenters Pension
Trust Fund v. Campa, 89 Cal.App.3d 113, 152 Cal.Rptr. 362 (1979),
appeal dismissed, 444 U.S. 1028 (1980). In Campa, the state court
held that ERISA did not preclude the division of pension rights in
state marital dissolution proceedings. The district court stated
that the Supreme Court's dismissal of Campa for want of a federal
question serves as a decision on the merits that ERISA's preemption
provision does not override community property law. Even assuming
that Campa provides a federal common law exception to the
preemption and anti-alienation provisions of ERISA to allow the
heirs of a nonparticipant spouse to acquire an interest in the
pension planSQand I do not believe that it doesSQthe enactment of
REA displaces any such exception.
21
of REA rendered nugatory the case law on point that was decided
before passage of these amendments.
Although the QDRO was not developed to cope exclusively with
community property issues under ERISA, both REA and its legislative
history make absolutely clear that this imaginative invention was
intended in large measure to deal with the recognition or partition
of any community property interests of the spouses in plan
benefits.52 Indeed, the official legislative history of REA
specifically notes that "[t]here is a divergence of opinion among
the courts as to whether ERISA preempts State community property
laws insofar as they relate to the rights of a married couple to
benefits under a pension, etc., plan."53
In the instant acronym, no letter is more important than "Q,"
for only when an [O]rder of a state [D]omestic [R]elations court is
"[Q]ualified" does the post-REA version of ERISA permit an
exception to the preemption rules in general and the anti-
alienation ("spendthrift") rules in particular. The legislative
history of REA states that "the Committee believes that conforming
changes to the ERISA preemption provision are necessary to ensure
that only those orders that are excepted from the spendthrift
provisions are not preempted by ERISA."54 Thus, if a state court
52
See 29 U.S.C. § 1056(d)(3)(B)(ii)(II) (defining a domestic
relation order to include one made "pursuant to a State domestic
relation law (including a community property law).") (emphasis
added).
53
S.Rep. No. 98-575, 2d Sess. 19, reprinted in 1984
U.S.C.C.A.N. 2547, 2565.
54
Id. (emphasis added).
22
order that purports to divide spousal rights in an ERISA-covered
plan does not meet the detailed, technical requirements of the
federal statute, it is not "qualified" and therefore is afforded no
exemption from ERISA's omnipotent preemption or anti-alienation
rules. Quite clearly, I believe, with the advent of the QDRO,
Congress purposefully provided an exclusive mechanism with which a
nonparticipant spouse may obtain recognition of a community
property right in the participant spouse's retirement plan.
What is also quite limited is the category of persons eligible
to seek and obtain a QDRO: only spouses!55 Not their heirs, not
their legatees, not their executors, not their trustees, not their
creditors.56 Akin to standing, the right of action to obtain a QDRO
is strictly personal to the spouse qua spouse; and only a living
spouse (or, in the event of divorce, a living ex-spouse) can obtain
a QDRO.
Congress carefully crafted the QDRO to constitute a narrow
exception to ERISA's otherwise all-encompassing preemption and
spendthrift provisions. Any court order that purports to recognize
the interest of a nonparticipant spouse —— or of any other party,
for that matter —— in an ERISA plan or in the benefits of such a
plan but fails to meet "qualification" muster under REA, in both
form and substance, remains vulnerable to ERISA preemption. Here,
55
Of course, a dependent child can be an "alternate payee"
under the statute with respect to orders relating to the provision
of child support. See 29 U.S.C. § 1056(d)(3)(B), (K). Providing
for child support, however, is in no way implicated in this case.
56
See Ablamis, 937 F.2d at 1456.
23
neither a probate order nor a judgment in the suit filed by the
Sons to obtain an accounting could even come close to meeting the
stringent definition of a QDRO.57 The fact that Congress surgically
carved out this single exception to preemption and restricted its
availability to living spouses or ex-spouses, counsels ever so
strongly against allowing the heirs or legatees or creditors or
trustees of a spouse to obtain partition of a putative community
property interest in an ERISA plan in any manner other than the one
expressly sanctioned by the statute. To do otherwise would be to
turn this preeminent post-REA feature of ERISA on its head.
Neither did REA pave a one-way street. By way of tradeoff and
consistency, REA brings to ERISA both parity and protection for the
nonparticipant spouse. It does so by mandating survivorship rights
for the nonparticipant spouse in and to plan benefits.58 Any
surviving nonparticipant spouseSQwhether first or subsequentSQis the
automatic successor beneficiary under the plan,59 unless he or she
57
Ablamis v. Roper, 937 F.2d 1450 (9th Cir. 1991).
58
29 U.S.C. § 1055. This requirement applies to most, but
not all, ERISA-covered plans. See 29 U.S.C. § 1055(b). I in no
way suggest — and, indeed, would strongly disagree — that the
conclusion in favor of preemption is applicable only to those
ERISA-covered pension plans subject to this requirement.
59
For example, if a vested participant dies after the annuity
starting date, the accrued benefits payable to her will be paid to
her surviving spouse in the form of a "qualified joint and survivor
annuity" (QJSA). A QJSA is an annuity:
(1) for the life of the participant with a survivor annuity
for the life of the spouse which is not less that 50 percent of
(and is not greater than 100 percent of) the amount of the annuity
which is payable during the joint lives of the participant spouses,
and
(2) which is the actuarial equivalent of a single annuity for
the life of the participant.
24
shall have executed an express and technically correct written
consent in conformity with the statute.
Here again, I believe that the district court erred by relying
on pre-REA case law. It did so in an effort to support the
statement that ERISA does not display any particular interest in
preserving benefits for any particular beneficiary. But that
statement is simply wrong: The exact opposite is true. Ever since
the enactment of REA, ERISA has exhibited an extraordinary interest
in protecting the surviving spouse of the participant employee,
going so far as to trump the participant employee's own beneficiary
designation if, absent spousal consent, the designee is not the
participant’s surviving spouse. By statutory enactment, then,
Congress has elected to designate for each and every participant in
an ERISA plan precisely who the "natural objects of his or her
bounty" must be. And, in making that election, Congress has opted
to elevate the nonparticipant spouse (or, in the case of divorce,
the nonparticipant ex-spouse) above such presumptive candidates as
the descendants or other heirs, legatees or assigns of either
spouse. In and of itself, this apparently arbitrary "prioritizing"
might be viewed by some as an unusual federal intrusion into state
marital property rights. But, if so, it is nevertheless an
29 U.S.C. § 1055(d).
The survivor beneficiary rules also apply to certain
individual account plans unless, inter alia, the vested account
balance is payable in full, upon the death of the participant, to
the participant's surviving spouse. See 29 U.S.C. § 1055(b)(1).
That a particular plan may be one of the plans excepted from these
rules, however, would not affect the conclusion that ERISA preempts
the Louisiana community property law claims at issue.
25
intrusion that Congress manifestly and expressly determined to be
warrantedSQnay, requiredSQto accomplish the ends of ERISA. And that
is the prerogative of Congress, not of the courts.
Thus ERISA's survivor annuity rules unquestionably established
protection of spouses as the top priority under the statute. These
provisions reinforce the conclusion that no heritable right exists
in the heirs of a predeceased spouse, whether participant or
nonparticipant, particularly when such right could act to deprive
a surviving spouse of the benefits expressly granted by the
statute.60 Moreover, these provisions illuminate the fact that in
the instant litigation neither First Spouse nor her heirs and
legatees have any property interest whatsoever in the payments
received or to be received by Surviving Spouse as a survivor
annuitant. Any right in personam that First Spouse might have had
with respect to survivor annuity payments was conditioned on her
outliving Participant; and even then she would have received
payments from the plan only for the duration of her life. When
First Spouse died, her right to a survivor annuity evaporated.
Additionally, if Participant had thereafter remained single
until his death, no survivor annuity would have existed at all.
The survivor annuity payments made and to be made to Surviving
Spouse are the result of federal law’s automatically creating this
60
Ironically, if the Sons' cause of action were allowed to
prevail, it would give a nonparticipant spouse greater ability than
that of the participant to designate third parties as plan
beneficiaries. That a participant spouse could thus be
"disinherited" without his or her consent, whereas a nonparticipant
spouse could not, would be both inconsistent and incompatible with
the purposes of both ERISA and REA.
26
brand new right as a consequence of her marriage to Participant ——
his second marriage. Such a right has nothing whatsoever to do
with the community that previously existed between Participant and
First Spouse. Thus, with respect to survivor annuity benefits of
Surviving Spouse, there is simply no property or personal interest
which First Spouse or her heirs can claim and no right of action
against Surviving Spouse as the statutorily recognized beneficiary
of the Bell Plan’s survivor annuity.
REA's amendments to and augmentation of ERISA also reinforce
the constant refrain that "pensions are for the living."61 Both the
QDRO mechanism and the survivor annuity rules accomplish this clear
purpose of protecting a living dependent of the participant,
regardless of whether the participant himself is living or
deceased. And Congress in its wisdom has designated the
nonparticipant spouse as the one among all of the employee's
potential "dependents" who is to be thus protected. Again, in
addition to achieving national uniformity, the other central
purpose of ERISA is to protect pension benefits in the way best
calculated to provide retirement income to employees and their
living dependents —— especially their surviving spouses —— not to
provide, ensure, or preserve legacies or inheritances, or the
putative testamentary power of a nonparticipant spouse to alienate
an interest in plan benefits. It seems certain to me that, when
properly analyzed, a cause of action that would allow the heirs or
legatees of a nonparticipant spouse to claim a state domestic
61
Ablamis v. Roper, 937 F.2d 1450, 1457.
27
property law interest in benefits otherwise payable to the
participant or his congressionally favored dependent(s) flies in
the face of congressional intent and does "major damage" to the
purposes of ERISA.62
4. Anti-Alienation
Thus far I have examined ERISA preemption in relatively broad,
conceptual terms, implicating primarily Congressional intent and
statutory goals. But one must also ask if there is not something
specific in ERISA that must be upheld or enforced, through the
exercise of preemption, to ensure the attainment of those goals
while maintaining the integrity of the statute as a cohesive whole.
The answer is "yes"; and in this case that “something” is ERISA's
prohibition of alienation, its so-called "spendthrift" rules. For,
in ERISA's unique and complex structure, "anti-alienation" is an
indispensable, load-bearing element, and the one specifically at
issue in this case. It is also key to understanding both the
tension between ERISA and the community property provisions
involved in this case, and the broader role of preemption as well.
ERISA's spendthrift provision unequivocally and
unconditionally commands that "benefits provided under the plan may
not be assigned or alienated."63 Similar to (but not congruent
with) the trust law concept from which it was borrowed, ERISA's
62
Although in the instant case Participant married Surviving
Spouse after the death of his First Spouse, I am satisfied that REA
supports preemption in all cases, including situations in which the
plan participant remains single.
63
29 U.S.C. § 1056(d)(1).
28
uniquely crafted spendthrift provision is designed to protect
retirement income and all other pension benefits not only from the
claims of creditors and other third parties (such as heirs and
legatees), i.e.,"involuntary alienation," but from the
participant's own foolishness and profligacy as well, i.e.,
"voluntary alienation." The Supreme Court has recognized that
ERISA'S spendthrift provision "reflects a considered congressional
policy choice to safeguard a stream of income for pensioners (and
their dependents ...), even if that decision prevents others from
securing relief for the wrongs done them."64
The district court concluded that "ERISA's anti-alienation
provision does not operate to preempt Louisiana community property
law."65 I could not disagree more strongly: ERISA's anti-
alienation rule is directly implicated in and "inextricably
intertwined" with the instant circumstances.
The district court grounded that conclusion on what appears to
be two fallacious premises. First, citing pre-REA case law, the
court stated that Congress did not intend to alter familial and
support obligations when it enacted the anti-alienation provision.
Here, the district court's undoing is, again, its reliance on cases
made obsolete by the enactment of REA. As discussed in detail
above, REA amended ERISA for the express purpose of cleaning up the
mess created by prior inconsistent and misapprehending
64
Guidry v. Sheet Metal Workers National Pension Fund, 493
U.S. 365, 376 (1990).
65
The court raised this anti-alienation argument sua sponte.
29
jurisprudence; REA created the unique concept of the QDRO and
commissioned it to serve as the exclusive exception to anti-
alienation.66 Since the adoption of REA, it is only by obtaining
a QDRO that the nonparticipant spouse or ex-spouse can avoid the
spendthrift provisions of ERISA and have a community interest in an
ERISA plan recognized.67 The Sons do not argue, nor could they,
that the QDRO requirements have been complied with in this case.
The district court's first reason seems anachronistic at best, and
clearly inapposite.
The second reason given by the district court for holding that
the spendthrift provision is not implicated by the operation of
Louisiana's community property law is that the First Spouse's
interest was "acquired by her directly at the outset and did not
represent a transfer to her of rights which had previously accrued
to [Participant]." I see that pronouncement as simply irrelevant.
Indeed, the relevant “transfer” inquiry is not whether the First
Spouse acquired her interest by way of a transfer, but whether the
Sons' causes of action depend on the efficacy of the attempted
transfer —— from First Spouse to the Sons —— of her community
interest in the plan. Obviously it does, and just as obviously her
attempted alienation is proscribed by ERISA's spendthrift
provision, making it a nullity.
66
See 29 U.S.C. § 1056(d)(3).
67
S. Rep. No. 98-575 at 19, reprinted in 1984 U.S.C.C.A.N.
at 2565 ("The Committee believes that . . . the ERISA preemption
provisions are necessary to ensure that only those orders that are
excepted from the spendthrift provisions [i.e., QDROs] are not
preempted.") (emphasis added).
30
The Sons' action in Louisiana state court seeks an accounting
of their father's usufruct. Apparently without analysis, the Sons
implicitly assume that, among the interests that were included in
their mother’s legacy to them of the naked ownership of two-thirds
of her half of all community assets, was some fractional interest
in their father's account in the Bell Plan. Based on that
erroneous assumption, the Sons proceed to seek an accounting, plus
a judicial recognition of an ownership interest in past and future
Bell Plan benefits. The district court appears to have proceeded
on the same flawed assumption, i.e., that the First Spouse's legacy
to the Sons effected a transfer of, inter alia, her community
interest in the Bell Plan.
But, given ERISA's ban on both voluntary and involuntary
alienation, the First Spouse had no legal power, whether inter
vivos or testamentary, to effectuate a transferSQan alienationSQof
any interest in an ERISA plan. The Sons' asserted cause of action
and the district court's reasoning presupposes that Participant's
testamentary usufruct from First Spouse actually included an
interest in Bell Plan retirement benefits. Yet he could not have
received such an interest from her any more than could the Sons
have received from her a naked ownership interest in the plan
benefits. As ERISA's spendthrift provision absolutely bars
alienation,68 a bequest of a usufruct in the plan benefits would be
a prohibited transfer, just as would a bequest of the naked
ownership. It thus seems indisputable that one asset that the
68
Ablamis v. Roper, 937 F.2d 1450 (9th Cir. 1991).
31
testamentary usufruct never covered was the interest of the
community in the Bell Plan or its benefits, regardless of the
purported effects of the First Spouse's testament or her succession
representative’s treatment of such interests in her Louisiana
succession.
Although not entirely clear, the Sons' asserted cause of
action may also be grounded in the proposition that the
Participant, as spouse, has an obligation to account for First
Spouse's community property. Of course, as a designated
beneficiary, Surviving Spouse would owe no such obligation to First
Spouse's estate.69 Thus, with respect to the cause of action
against Surviving Spouse, this argument is simply irrelevant.
Framing the cause of action against Participant's estate as an
obligation to account should not compel a different conclusion. In
reality, the Sons' accounting action is a thinly disguised attempt
to obtain ownership of “property” that they contend was bequeathed
to or inherited by them. An absolute prerequisite of the heirs'
right of action or standing to compel such an accounting, however,
is that they have an interest in the property for which an
accounting is sought. But, again, the Sons cannot have acquired
such a prerequisite interest in these retirement benefits because
69
A designated beneficiary is not a debtor of the old
community. Thus, the proceeds of a retirement plan payable to a
designated beneficiary, like the proceeds of an insurance policy
payable to a designated beneficiary, are not subject to execution
in satisfaction of the debts of the decedent or his estate, whether
owed to the heirs of his deceased spouse or otherwise. In
addition, as explained above, First Spouse and her heirs have no
property interest whatsoever in survivor annuity benefits payable
to Surviving Spouse.
32
ERISA's spendthrift provisions interdict absolutely any attempted
alienation that is not in "qualified" form. Even a cursory reading
of the requirements for qualifying as a QDRO reflects that neither
intestate nor testamentary transfers can qualify. I thus believe
that, as a matter of law, the premise on which the Sons' cause of
action is based, i.e., one transfer from their mother to their
father and a second, contemporaneous transfer from her to them, is
non-existent.70
I therefore find inescapable the conclusion that ERISA's anti-
alienation provision preempts those provisions of Louisiana
community property law that are pertinent to this decision. As
such, ERISA’s proscription of transfer functioned to prevent the
Sons —— and, for that matter, Participant —— from obtaining from
First Spouse, by testament or otherwise, any interest in the share
of the community's putative interest in Participant's retirement
plan or its benefits claimed by the Sons. To reach this
conclusion, I had to determine which law prevails, ERISA's
"spendthrift" canon or Louisiana's community property law. In
giving the nod to ERISA, I plainly recognize its preemptive effect.
When, as here, some aspect of state law "relates to" an ERISA plan
70
Proponents of the Sons' position contend that, because a
spendthrift provision generally ceases to shield funds after they
have been distributed from the trust, no violation of this
provision has occurred in the instant case. This reasoning is
unconvincing. The Sons' claims are inextricably tied to an
attempted alienation of the benefits at a time when those benefits
remained in the plan and could not be alienated. These claims are
readily distinguishable from those of a creditor against the
distributed benefits that are unrelated to an asserted ownership
claim of the benefits themselves.
33
—— particularly when it directly conflicts with a key provision of
ERISA, such as anti-alienation —— the latter trumps by virtue of
preemption. Only through the terrible swift sword of preemption is
the frustrating of Congress's announced goals trampled.
The QDRO is an exception to both statutory preemption in
general and to anti-alienation in particular. It is therefore not
surprising that both provisions are apposite to this case. Given
both the posture of this case and its importance, however, I do not
rest my conclusion exclusively on the anti-alienation provision.
Assuming, but certainly not conceding, that the anti-alienation
provision alone might not preclude the Sons' asserted cause of
action, I remain convinced that the express statutory preemption
provision surely does.
5. Civilian Sanctity Does Not Compel A Different Result
Louisiana's community regime is a time-honored Civilian
institution; it is not, for example, the result of a belated effort
of a common law state to obtain some federal tax advantage or
parity. Notwithstanding the venerability of Louisiana's community
property law and the implication of public policy that others might
argue are embodied in some facets of that regime, I observe that in
other areas of its private law, which are equally steeped in
tradition and intertwined with public policy, Louisiana has carved
out exceptions for ERISA-qualified employee benefit plans. For
example, qualified plans are found on Louisiana's list of property
that is exempt from claims of creditors in bankruptcy.71 A more
71
La. Rev. Stat. Ann. §13:3881(D).
34
instructive example is found in the law of forced heirship, under
which the decedent's interest in a qualified plan is exempt from
claims of forced heirs72 despite the fact that, at least until quite
recently, no Civilian cow was more sacred in Louisiana.73
Admittedly, there are distinguishing differences between these
examples and the instant case, but they serve to illustrate that
even under the Civil Law of Louisiana, ERISA-covered employee
benefit plans are recognized as being sui generis and are
frequently treated as such.74
But most of all, I cannot ignore the mandate of the federal
statute, the intent of Congress, and the purposes and structure of
ERISA. I therefore would have had this court conclude that ERISA
—— its expressed purposes and its particular provision against
alienation —— preempts Louisiana community property law to the
extent that such law would recognize and enforce a probate interest
of the heirs or legatees of a predeceased nonparticipant spouse in
an ERISA-qualified pension plan. To hold otherwise would seem to
72
La. Civ. Code Ann. art. 1505.
73
See La. Const. art. XII, § 5 (amended 1995) ("[n]o law
shall abolish forced heirship."); Succession of Lauga, 624 So.2d
1156 (La. 1993) (declaring legislative revamping of forced heirship
law unconstitutional). But see La. Const. art. XII § 5 (effective
November 23, 1995) (removing constitutional protection for forced
heirship except for children under 23 years of age or disabled).
74
Neither can I ignore the purely suppletive, non-mandatory
nature of Louisiana's community property regime. Both before and
during the marriage, a couple is entitled to select the marital
property regime of their choice, including not only the community
regime but also, inter alia, a regime of separate property that is
essentially identical to the common law system. See La. Civ. Code
Ann. art. 2336. I question just how sacrosanct a purely optional
property system can be.
35
frustrate ERISA's ultimate purposes of providing nationally uniform
governance of employee benefit law and ensuring receipt of
retirement benefits by participating employees and their
dependents.
6. No "End Runs" to Defeat the Effects of Preemption
The Sons sought —— and have now obtained —— a result that is
the equivalent of a decree of ownership of retirement benefits
under an ERISA plan. In a thinly veiled effort to get around
ERISA's anti-alienation bar, the Sons argue that an accounting,
with recovery in the form of a money judgment, does not violate
anti-alienation because the judgment would be payable from funds
that have been distributed and commingled with other assets, and
therefore no longer protected by the spendthrift provision's
shield.
I have already demonstrated why such a result cannot be
achieved by direct means: ERISA's anti-alienation provisions
render nugatory the First Spouse's purported transfer of "her"
community interest in the Bell Plan benefits. Anti-alienation thus
interdicts any efforts by the Sons to compel a plan administrator
to turn over to the Sons directly a portion of the benefits, simply
by virtue of their status as heirs of a nonparticipant spouse.75
And, I have also demonstrated that ERISA's preemption will enforce
anti-alienation over the laws of the state that are here at work.
I am satisfied that permitting the Sons to achieve the results they
desire by indirect means is likewise proscribed.
75
Ablamis v. Roper, 937 F.2d 1450 (9th Cir. 1991).
36
In other federal preemption contexts, the courts have stricken
efforts to employ indirect means to circumvent or undermine federal
law.76 In the context of United States bonds, the Supreme Court
stated that "[i]f the State can frustrate the parties' attempt to
use the bonds' survivorship provision through the simple expedient
of requiring the survivor to reimburse the estate of the deceased
co-owner as a matter of law, the State has interfered directly with
a legitimate exercise of the power of the Federal Government to
borrow money."77 Relying on that reasoning by analogy, at least one
district court has recognized that what ERISA prohibits directly
cannot be accomplished indirectly.78 The extraordinary protections
and policies embodied in ERISA could be emasculated to the point of
impotence were they so easily circumvented by enforcing indirectly
otherwise preempted claims or prohibited alienations under the
guise of an accounting action or claim of inheritance rights
against the plan beneficiary, or eventually the plan’s fiduciary.
C
CONCLUSION
76
See Free v. Bland, 369 U.S. 663 (1962) (holding that
federal law creating a right of survivorship in United States
Savings Bonds registered in co-ownership form preempted Texas
community property law).
77
Id. at 669.
78
Meeks v. Tullis, 791 F.Supp. 154, 157 (W.D. La. 1992)
(holding that a claim by the heirs of a nonparticipant spouse
against non-ERISA assets for the value of the community property
interest is preempted because to allow this claim would little
different than allowing a claim to the ERISA assets, which is
prohibited).
37
Based on the foregoing reasons, I am firmly convinced that
ERISA preempts Louisiana community property law to the extent that
such law would purport to recognize and enforce an interest of the
heirs of a nonparticipant spouse in an ERISA-qualified pension
plan. Whether the en banc court would have reached this same
conclusion cannot be said. What can be said, however, is that the
magnitude and importance of the issue presented by this case made
it worthy of review by the entire court. I regret that a majority
of my colleagues did not see it this way; that is why I
respectfully dissent from the decision not to rehear this most
important case en banc.
38
Boggs v. Boggs
Court: Court of Appeals for the Fifth Circuit
Date filed: 1996-07-18
Citations: 89 F.3d 1169
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