Lead Opinion
Opinion for the Court filed by Circuit Judge TATEL.
Concurring opinion filed by Senior Circuit Judge GINSBURG.
The Employee Retirement Income Security Act of 1974 (ERISA) entitles certain spouses of pension plan participants to a survivor annuity unless waived pursuant to clearly defined procedures. In this case, the pension plan participant concedes that ERISA vested an annuity in his ex-wife, but nonetheless argues that Texas law, including his Texas divorce decree, requires entry now of a declaratory judgment that, after his death, she place her annuity payments into a constructive trust for his benefit. The district court rejected this claim, holding that ERISA preempts any state law or state-court decree that would otherwise defeat the spouse’s vested annuity. For the reasons set forth in this opinion, we affirm.
I.
ERISA protects retirement benefits for millions of pension plan participants and their beneficiaries. 29 U.S.C. § 1001(b). Finding that the stability of retirement benefits directly affects the national economy, id. § 1001(a), Congress acted to ensure that accrued benefits remain unaltered by individuals and states alike. It accomplished this by prohibiting participants from assigning or alienating their own benefits, id. § 1056(d)(1), and, with limited exceptions, superseding state laws that “relate to any employee benefit plan,” id. § 1144(a). One exception rests on the fact that plan benefits are often considered marital community property, a domain traditionally reserved exclusively for state law. As a result, Congress exempted a narrow category of state-court orders, known as qualified domestic relations or
Despite this narrow exception, the protection of beneficiaries — especially spouses — remains a paramount ERISA objective. The crown jewel of ERISA’s spousal protection, the qualified joint and survivor annuity, provides monthly support for surviving spouses in the event of a participant’s death, whether occurring before or after retirement. Id. § 1055(a). Survivor annuity payments, equal to at least 50 percent of the participant’s benefits, continue for the remainder of the surviving spouse’s life. Id. § 1055(d)(1)(A). Although for most ERISA benefits, like life insurance and 401 (k) plans, participants may unilaterally waive benefits or designate beneficiaries, participants are powerless to “defeat a ... surviving spouse’s statutory entitlement to an annuity.” Boggs v. Boggs,
This case presents a conflict between state community property law and ERISA. Specifically, we must determine whether, after a survivor annuity has vested and absent a qualified domestic relations order, the plan participant may use state law to obtain legal control over his former spouse’s survivor benefit.
John and Melissa VanderKam married in 1984. An employee of the Huffy Corporation, John enrolled in the company’s retirement plan and designated Melissa as the beneficiary of a 100-percent qualified joint and survivor annuity. John retired in 1994, at which time the survivor annuity irrevocably vested in Melissa, and John began receiving monthly benefits. Eight years later, in March 2002, John and Melissa divorced, agreeing to a decree awarding John all “benefits existing by reason of [John’s] past, present, or future employment.” Final Divorce Decree 19, J.A. 290.
One year later, John remarried and sought to designate his new wife as the survivor annuity beneficiary. Counsel for Huffy’s pension plan advised John that this designation would be permissible if done pursuant to a qualified domestic relations order that, in accordance with ERISA, did not require the plan to increase benefits beyond actuarial estimates
In 2005, Huffy terminated its pension plan, and because the plan had insufficient assets to provide the benefits promised to its employees, the Pension Benefit Guaranty Corporation (PBGC) became the plan’s statutory trustee. Established by ERISA to provide pension benefit insurance and to “ensure that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans,” Connolly v. Pension Benefit Guaranty Corp.,
After PBGC’s Appeals Board affirmed the agency’s initial determination, John filed suit in the United States District Court for the District of Columbia, challenging PBGC’s decision as both contrary to ERISA and arbitrary and capricious in violation of the Administrative Procedure Act. Second Am. Compl. 2-11; Pis.’ Mot. Summ. J. 12. In response, and citing Melissa’s affidavit swearing that she “never intended to waive the survivor benefit” and “wish[ed] to claim [her] right to that benefit,” PBGC asked the district court to join Melissa as a necessary party. Melissa VanderKam Aff., J.A. 12. After the district court granted that motion, John amended his complaint to allege unjust
Relying on cases from the Fourth, Fifth, and Ninth Circuits, the district court found PBGC’s two determinations — that Melissa’s claim to the survivor benefit irrevocably vested upon John’s retirement and that the Texas court order was not a valid qualified domestic relations order — both reasonable and amply supported by the administrative record. VanderKam v. Pension Benefit Guaranty Corp.,
After John filed his appeal here, we granted his motion to dismiss PBGC from the case, leaving only his appeal of the district court’s grant of summary judgment in favor of Melissa on the state-law claims. Appellant’s Mot. to Dismiss PBGC (Apr. 2, 2014). Before reaching those claims, however, we must address the threshold issue of whether this case is ripe for review. See Exxon Mobil Corp. v. Federal Energy Regulatory Commission,
II.
Article III of the Constitution limits federal court jurisdiction to cases and controversies. U.S. Const, art. Ill, § 2. Consistent with this limitation and “our theoretical role as the governmental branch of last resort,” the ripeness doctrine precludes premature adjudication of “abstract disagreements” and instead reserves judicial power for resolution of concrete and “fully crystalized” disputes. National Treasury Employees Union v. United States,
In this case, Melissa will receive no survivor benefits if she predeceases John, which suggests that “[i]f we do not decide [the case] now, we may never need to,” id. Given our “independent obligation to assure ourselves of jurisdiction,” Floyd v. District of Columbia,
To determine whether a dispute is ripe for judicial consideration, we must evaluate (1) “the fitness of the issues for judicial decision” and (2) “the hardship to the parties of withholding court consideration.” Abbott Laboratories v. Gardner,
Under the fitness element, “we look to see whether the issue is purely legal” or instead “would benefit from a more concrete setting.” National Association of Home Builders v. U.S. Army Corps of Engineers,
As to the second element, we agree with John that denial of judicial review would presently cause him significant hardship, as it would “interfere[ ] with John’s ability to make decisions about the organization of his estate and the distribution of his property after his death.” Appellant’s Supplemental Br. 2. The very purpose of ERISA benefits, especially benefits accruing to dependents and spouses, is to provide economic security and peace of mind. 29 U.S.C. § 1001(a) (noting ERISA’s objective to protect “the continued well-being and security of millions of employees and their dependents”). Indeed, ERISA expressly authorizes preemptive litigation to “clarify ... rights to future benefits under the terms of [a] plan.” Id. § 1132(a)(1)(B) (emphasis added).
True, Melissa may predecease John, but John seeks declaratory relief now — relief that would be independent of any future events. John seeks not a constructive trust that will spring into existence only if Melissa someday receives the annuity payments, but rather a current declaration that he “has equitable title to the ... survivor benefit payments” and that “upon actual receipt of the ... payments, [Melissa] will owe fiduciary obligations to John and hold those payments in constructive trust.” Second Am. Compl. 13 (emphases added). A final decision regarding John’s entitlement to such a declaration would give him an immediate, concrete, and valuable benefit: certainty regarding whether monthly annuity payments will be paid to his ex-spouse and son’s mother, or whether he can assign those payments to a different beneficiary of his choosing. This case thus presents a fully crystalized dispute ripe for our resolution.
III.
Having elected to dismiss his appeal against PBGC, John makes three key concessions: (1) that the survivor annuity vested in Melissa upon his retirement, (2) that any supposed waiver in the divorce agreement was invalid under ERISA, and (3) that the Texas court order was not a valid qualified domestic relations order. In other words, John concedes that under ERISA, the survivor annuity belongs to Melissa. Given this, we face a single question: May John use state law to seize a benefit that federal law has vested in Melissa?
ERISA “supersede^] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” 29 U.S.C. § 1144(a). Despite the simplicity of the statutory text, “ERISA pre-emption questions are recurrent,” reflecting “the comprehensive nature of the statute, the centrality of pension and welfare plans in the national economy, and their importance to the financial security of the Nation’s work force.” Boggs,
In this case, the nature of the federal interest is obvious. Congress designed ERISA “to promote the interests of employees and their beneficiaries in employee benefit plans.” Shaw v. Delta Air Lines, Inc.,
Against this clear congressional objective — ensuring ongoing financial support for divorced and surviving spouses — John invokes a Texas statute providing that “[t]he subsequent actual receipt by the non-owning party of property awarded to the owner in a decree of divorce or annulment creates a fiduciary obligation in favor of the owner and imposes a constructive trust on the property for the benefit of the owner.” Tex. Fam.Code Ann. § 9.011(b). Despite conceding that ERISA vested the survivor benefit in Melissa, John argues that the divorce decree and this Texas
The conflict between ERISA and Texas law could hardly be starker — what ERISA gives to Melissa, John argues, Texas takes away. But as the Supreme Court held in Boggs, “in the face of this direct clash between state law and the provisions and objectives of ERISA, the state law cannot stand.” Boggs,
John nonetheless insists that his claims fall outside ERISA’s preemption of state laws that “relate to any employee benefit plan,” 29 U.S.C. § 1144(a) (emphasis added), because he seeks title only to Melissa’s benefits. In Boggs, however, the Supreme Court expressly rejected this argument. There, a participant’s first wife attempted to transfer her survivor annuity benefits to the couple’s adult sons through her will. Boggs,
John also contends that although the divorce agreement is invalid as a waiver of Melissa’s right to receive, her survivor annuity under ERISA, the agreement remains a valid waiver of Melissa’s right to retain her benefits under Texas law. In fact, he argues, Melissa is collaterally es-topped from arguing otherwise. But this argument only highlights the conflict between ERISA and the Texas statute: state law may not resurrect an agreement invalidated by federal law. And, like John’s plan vs. benefits argument, the distinction between the right to receive benefits, as opposed to the right to retain them, has been expressly rejected by the Supreme Court. In Hillman, the Court invalidated a state law that imposed personal liability on beneficiaries of life insurance under the Federal Employee Group Life Insurance Act, holding that with a beneficiary’s designation “comes the expectation that the ... proceeds will be paid ... and that the beneficiary can use them.”
Finally, John points to the Supreme Court’s decision in Kennedy v. Plan Ad
Indeed, the Ninth Circuit, the only circuit to have considered the Kennedy question in the survivor annuity context, concluded that permitting a “constructive trust on the proceeds of a pension plan ... would allow for an end-run around ERISA’s rules and Congress’s policy objective of providing for certain beneficiaries, thereby greatly weakening, if not entirely abrogating, ERISA’s broad preemption provision.” Carmona v. Carmona,
In conclusion, we emphasize the narrowness of our opinion. This case involves an effort by a plan participant to obtain an interest in undistributed plan benefits, and we hold only that absent a qualified domestic relations order and compliance with ERISA’s strict waiver provisions for survivor annuities, he may not use state law for that purpose. This opinion has nothing to say about how ERISA might affect an effort by a plan participant to use state law to obtain an interest in benefits after distribution to the beneficiary. That question is not presented in this case, and we express no opinion on it.
IV.
For the reasons given above, we affirm the judgment of the district court.
So ordered.
Concurrence Opinion
concurring:
Although I agree John VanderKam may not use state law to obtain an interest in Melissa VanderKam’s ERISA-protected survivor annuity, I write separately to emphasize that the Court has not today decided all state laws are preempted insofar as they burden qualified joint and survivor annuity (QJSA) benefits that have not yet been disbursed. The Court’s holding is necessarily limited to the situation in which the claimed source of authority for obtaining an interest in QJSA benefits is an agreement in the divorce decree of a plan participant and his beneficiary in which the beneficiary purports to waive her right to the survivor annuity. Because other ways of obtaining an interest in ERISA benefits, specifically those to which the Congress spoke in the anti-alienation provision of 29 U.S.C. § 1056(d), are not before us, we have no occasion to decide
John argues that although the divorce decree did not give rise to a valid qualified domestic relations order (QDRO), the requirements for a QDRO in § 1056(d) are intended only to “creat[e] a path for participants and beneficiaries to enforce their private agreements directly against a plan” and therefore do not preempt 'a state law that is used to enforce directly against a beneficiary her agreement to alienate her benefits. John’s argument is beside the point because Melissa “did not assign or alienate anything to [John] or to the Estate later standing in his shoes.” Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan,