MCCARTY v. MCCARTY
No. 80-5
Supreme Court of the United States
Argued March 2, 1981—Decided June 26, 1981
453 U.S. 210
Mattaniah Eytan argued the cause and filed briefs for appellant.
Walter T. Winter argued the cause for appellee. With him on the brief was Barbara R. Dornan.*
JUSTICE BLACKMUN delivered the opinion of the Court.
A regular or reserve commissioned officer of the United States Army who retires after 20 years of service is entitled to retired pay.
I
Although disability pensions have been provided to military veterans from the Revolutionary War period to the
The impetus for this legislation was the need to encourage or force the retirement of officers who were not fit for wartime duty.2 Women and Retirement, at 15. Thus, from
Under current law, there are three basic forms of military retirement: nondisability retirement; disability retirement; and reserve retirement. See id., at 4. For our present purposes, only the first of these three forms is relevant.4 Since each of the military services has substantially the same nondisability retirement system, see id., at 5, the Army‘s system may be taken as typical.5 An Army officer who has 20 years of service, at least 10 of which have been active service as a commissioned officer, may request that the Secretary of the
The nondisability retirement system is noncontributory in that neither the service member nor the Federal Government makes periodic contributions to any fund during the period of active service; instead, retired pay is funded by annual appropriations. Military Retirement Hearings, at 5. In contrast, since 1957, military personnel have been required to contribute to the Social Security System. Pub. L. 84-881, 70 Stat. 870. See
Military retired pay terminates with the retired service member‘s death, and does not pass to the member‘s heirs. The member, however, may designate a beneficiary to receive any arrearages that remain unpaid at death.
Because the RSFPP was self-financing, it required the deduction of a substantial portion of the service member‘s retired pay; consequently, only about 15% of eligible military retirees participated in the plan. See H. R. Rep. No. 92-481, pp. 4-5 (1971); S. Rep. No. 92-1089, p. 11 (1972). In order to remedy this situation, Congress enacted the Survivor Benefit Plan (SBP) in 1972. Pub. L. 92-425, 86 Stat. 706, codified, as amended, at
II
Appellant Richard John McCarty and appellee Patricia Ann McCarty were married in Portland, Ore., on March 23, 1957, while appellant was in his second year in medical school at the University of Oregon. During his fourth year in medical school, appellant commenced active duty in the United States Army. Upon graduation, he was assigned to successive tours of duty in Pennsylvania, Hawaii, Washington, D. C., California, and Texas. After completing his duty in Texas, appellant was assigned to Letterman Hospital on the Presidio Military Reservation in San Francisco, where he became Chief of Cardiology. At the time this suit was instituted in 1976, appellant held the rank of Colonel and had served approximately 18 of the 20 years required under
Appellant and appellee separated on October 31, 1976. On December 1 of that year, appellant filed a petition in the Superior Court of California in and for the City and County of San Francisco requesting dissolution of the marriage. Under California law, a court granting dissolution of a marriage must divide “the community property and the quasi-community property of the parties.”
“all real or personal property, wherever situated heretоfore or hereafter acquired . . . [b]y either spouse while domiciled elsewhere which would have been community property if the spouse who acquired the property had been domiciled in [California] at the time of its acquisition.”
Cal. Civ. Code Ann. § 4803 (West Supp. 1981).
Upon dissolution of a marriage, each spouse has an equal and absolute right to a half interest in all community and quasi-community property; in contrast, each spouse retains his or her separate property, which includes assets the spouse owned before marriage or acquired separately during marriage through gift. See Hisquierdo, 439 U. S., at 578.
In his dissolution petition, appellant requested that all listed assets, including “[a]ll military retirement benefits,” be confirmed to him as his separate property. App. 2. In her response, appellee also requested dissolution of the marriage, but contended that appellant had no separate property and that therefore his military retirement benefits were “subject to disposition by the court in this proceeding.”8 Id., at 8-9. On November 23, 1977, the Superior Court entered findings of fact and conclusions of law holding that appellant was entitled to an interlocutory judgment dissolv-
“that portion of his total monthly pension or retirement payment which equals one-half (1/2) of the ratio of the total time between marriage and separation during which [appellant] was in the United States Army to the total number of years he has served with the... Army at the time of retirement.” Id., at 43-44.
The court retained jurisdiction “to make such determination at that time and to supervise distribution....” Ibid. On September 30, 1978, appellant retired from the Army after 20 years of active duty and began receiving retired pay; under the decree of dissolution, appellee was entitled to approximately 45% of that retired pay.
Appellant sought review of the portion of the Superior Court‘s decree that awarded appellee an interest in the retired pay. The California Court of Appeal, First Appellate District, however, affirmed the award. App. to Juris. Statement 32. In so ruling, the court declined to accept appellant‘s contention that because the federal scheme of military retirement benefits pre-emрts state community property laws, the Supremacy Clause,
The California Supreme Court denied appellant‘s petition for hearing. App. to Juris. Statement 83.
We postponed jurisdiction. 449 U. S. 917 (1980). We have now concluded that this case properly falls within our appellate jurisdiction,12 and we therefore proceed to the merits.
III
This Court repeatedly has recognized that “‘[t]he whole subject of the domestic relations of husband and wife . . . belongs to the laws of the States and not to the laws of the United States.‘” Hisquierdo, 439 U. S., at 581, quoting In re Burrus, 136 U. S. 586, 593-594 (1890). Thus, “[s]tate family and family-property law must do ‘major damage’ to ‘clear and substantial’ federal interests before the Supremacy Clause will demand that state law be overridden.” Hisquierdo, 439 U. S., at 581, with references to United States v. Yazell, 382 U. S. 341, 352 (1966). See also Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504, 522 (1981). In Hisquierdo, we concluded that California‘s application of community property principles to Railroad Retirement Act benefits worked such an injury to federal interests. The “critical terms” of the federal statute relied upon in reaching that conclusion included provisions establishing “a specified beneficiary protected by a flat prohibition against attachment and anticipation,” see
A
Appellant argues that California‘s application of community property concepts to military retired pay conflicts with federal law in two distinct ways. He contends, first, that the California court‘s conclusion that retired pay is “awarded in return for services previously rendered,” see Fithian, 10 Cal. 3d, at 604, 517 P. 2d, at 457, ignores clear federal law to the contrary. The community property division of military retired pay rests on the premise that that pay, like a typical pension, represents deferred compensation for services performed during the marriage. Id., at 596, 517 P. 2d, at 451. But, appellant asserts, military retired pay in fact is current compensation for reduced, but currently rendered, services; accordingly, even under California law, that pay may not be treated as community property to the extent that it is earned after the dissolution of the marital community, since the earnings of a spouse while living “separate and apart” are separate property.
Appellant correctly notes that military retired pay differs in some significant respects from a typical pension or retirement plan. The retired officer remains a member of the Army, see United States v. Tyler, 105 U. S. 244 (1882),13 and
Appellee argues that Congress’ use of the term “personal entitlement” in this context signifies only that retired pay ceases upon the death of the service member. But several features of the statutory schemes governing military pay demonstrate that Congress did not use the term in so limited a fashion. First, the service member may designate a beneficiary to receive any unpaid arrearages in retired pay upon his death.
Second, the language, structure, and legislative history of the RSFPP and the SBP also demonstrate that retired pay is a “personal entitlement.” While retired pay ceases upon the death of the service member, the RSFPP and the SBP allow the service member to reduce his or her retired pay in ordеr to provide an annuity for the surviving spouse or children. Under both plans, however, the service member is free to elect to provide no annuity at all, or to provide an annuity payable only to the surviving children, and not to the spouse. See
Moreover, such a division would have the anomalous effect of placing an ex-spouse in a better position than that of a widower or a widow under the RSFPP and the SBP.21 Ap-
Third, and finally, it is clear that Congress intended that military retired pay “actually reach the beneficiary.” See Hisquierdo, 439 U. S., at 584. Retired pay cannot be attached to satisfy a property settlement incident to the dissolution of a marriage.22 In enacting the SBP, Congress re-
Subsequently, comprehensive legislation was enacted. In 1975, Congress amended the Social Security Act to provide that all federal benefits, including those payable to members of the Armed Services, may be subject to legal process to enforce child support or alimony obligations.
Hisquierdo also pointed out that Congress might conclude that this distinction between support and community property claims is “undesirable.” Id., at 590. Indeed, Congress recently enacted legislation that requires that Civil Service retirement benefits be paid to an ex-spouse to the extent provided for in “the terms of any court order or court-approved property settlement agreement incident to any court decree of divorce, annulment, or legal separation.”
B
We conclude, therefore, that there is a conflict between the terms of the federal retirement statutes and the community property right asserted by appellee here. But “[a] mere conflict in words is not sufficient“; the question remains whether the “consequences [of that community property right] sufficiently injure the objectives of the federal program to require nonrecognition.” Hisquierdo, 439 U. S., at 581-583. This inquiry, however, need be only a brief one, for it is manifest that the application of community property principles to military retired pay threatens grave harm to “clear and substantial” federal interests. See United States v. Yazell, 382 U. S., at 352. Under the Constitution, Congress has the power “[t]o raise and support Armies,” “[t]o provide and maintain a Navy,” and “[t]o make Rules for the Government and Regulation of the land and naval Forces.”
In the first place, the community property interest appellee seeks “promises to diminish that portion of the benefit Congress has said should go to the retired [service member] alone.” See Hisquierdo, 439 U. S., at 590. State courts are not free to reduce the amounts that Congress has determined are necessary for the retired member. Furthermore, the community property division of retired pay may disrupt the carefully balanced scheme Congress has devised to encourage a service member to set aside a portion of his or her retired pay as an annuity for a surviving spouse or dependent children. By diminishing the amount available to the retiree, a community property division makes it less likely that the retired service member will choose to reduce his or her retired pay still further by purchasing an annuity for the surviving spouse, if any, or children. In McCune v. Essig, 199 U. S. 382 (1905), the Court held that federal law, which permitted a widow to patent federal land entered by her husband, prevailed over the interest in the patent asserted by the daughter under state inheritance law; the Court noted that the daughter‘s contention “reverses the order of the statute and gives the children an interеst paramount to that of the widow through the laws of the State.” Id., at 389. So here, the right appellee asserts “reverses the order of the statute” by giving the ex-spouse an interest paramount to that of the surviving spouse and children of the service member; indeed, at least one court (in a noncommunity property State) has gone so far as to hold that the heirs of the ex-spouse may even inherit her interest in military retired pay. See In re Miller, — Mont. —, 609 P. 2d 1185 (1980), cert. pending sub nom. Miller v. Miller, No. 80-291. Clearly, “[t]he law of the State is not competent to do this.” McCune v. Essig, 199 U. S., at 389.
The interference with the goals of encouraging orderly promotion and a youthful military is no less direct. Here, as in the Railroad Retirement Act context, “Congress has fixed an amount thought appropriate to support an employee‘s old age and to encourage the employee to retire.” See Hisquierdo, 439 U. S., at 585. But the reduction of retired pay by a community property award not only discourages retirement by reducing the retired pay available to the service member, but gives him a positive incentive to keep working, since current income after divorce is not divisible as community property. See
IV
We recognize that the plight of an ex-spouse of a retired service member is often a serious one. See Hearing on H. R. 2817, H. R. 3677, and H. R. 6270 before the Military Compensation Subcommittee of the House Committee on Armed Services, 96th Cong., 2d Sess. (1980). That plight may be mitigated to some extent by the ex-spouse‘s right to claim Social Security benefits, cf. Hisquierdo, 439 U. S., at 590, and to garnish military retired pay for the purposes of support. Nonetheless, Congress may well decide, as it has in the Civil Service and Foreign Service contexts, that more protection
The judgment of the California Court of Appeal is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
JUSTICE REHNQUIST, with whom JUSTICE BRENNAN and JUSTICE STEWART join, dissenting.
Thе Court‘s opinion is curious in at least two salient respects. For all its purported reliance on Hisquierdo v. Hisquierdo, 439 U. S. 572 (1979), the Court fails either to quote or cite the test for pre-emption which Hisquierdo established. In that case the Court began its analysis, after noting that States “lay on the guiding hand” in marriage law questions, by stating:
“On the rare occasion where state family law has come into conflict with the federal statute, this Court has limited review under the Supremacy Clause to a determination whether Congress has ‘positively required by direct enactment’ that state law be pre-empted. Wetmore v. Markoe, 196 U. S. 68, 77 (1904).” Id., at 581.
The reason for the omission of this seemingly critical sentence from the Court‘s opinion today is of course quite clear: the Court cannot, even to its satisfaction, plausibly maintain that Congress has “positively required by direct enactment” that California‘s community property law be pre-empted by the
The other curious aspect of the Court‘s opinion, related to the first, is the diverting analysis it provides of laws and legislative history having little if anything to do with the case at bar. The opinion, for example, analyzеs at great length Congress’ actions concerning the attachability of federal pay to enforce alimony and child support awards, ante, at 228-230. However interesting this subject might be, this case concerns community property rights, which are quite distinct from rights to alimony or child support, and there has in fact been no effort by appellee to attach appellant‘s retired pay. To take another example, we learn all about the provisions governing Foreign Service and Civil Service retirement pay, ante, at 230-232. Whatever may be said of these provisions, it cannot be said that they are “direct enactments” on the question whether military retired pay may be treated as community property. The conclusion is inescapable that the Court has no solid support for the conclusion it reaches—certainly no support of the sort required by Hisquierdo—and accordingly I dissent.
I
Both family law and property law have been recognized as matters of peculiarly local concern and therefore governed by state and not federal law. In re Burrus, 136 U. S. 586, 593-594 (1890); United States v. Yazell, 382 U. S. 341, 349, 353 (1966). Questions concerning the appropriate disposition of property upon the dissolution of marriage, therefore, such as the question in this case, are particularly within the control of the States, and the authority of the States should not be displaced except pursuant to the clearest direction from Con
The first such case was McCune v. Essig, 199 U. S. 382 (1905). McCune‘s father, a homesteader, died before completing the necessary conditions to obtain title to the land. McCune claimed that under the community property laws of the State of Washington she was entitled to a half interest in her father‘s land. Congress in the Homestead Act, however, had “positively required by direct enactment,” Hisquierdo, supra, at 581, that in the case of a homesteader‘s death the widow would succeed to the homesteader‘s interest in the land. Indeed, the Act set forth an explicit schedule of succession which specifically provided for a homesteader‘s daughter such as McCune. She succeeded to rights and fee under the statute only in the case of the death of both her father and mother. In the words of Justice McKenna:
“It requires an exercise of ingenuity to establish uncertainty in these provisions. . . . The words of the statute are clear, and express who in turn shall be its beneficiaries. The contention of appellant reverses the order of the statute and gives the children an interest paramount to that of the widow through the laws of the state.” 199 U. S., at 389.
There is, of course, nothing remotely approaching this situation in the case at bar. Congress has not enacted a schedule governing rights of ex-spouses to military retired pay and appellee‘s claim does not go against any such schedule.1
The next case from this Court finding pre-emption of community property law did not arise until 45 years later. In Wissner v. Wissner, 338 U. S. 655 (1950), the deceased serviceman‘s estranged wife claimed she was entitled to one-half of the proceeds of a National Service Life Insurance policy, the premiums of which were paid out of the serviceman‘s pay accrued while he was married, even though decedent had designated his parents as the beneficiaries. The Act in question specifically provided that the serviceman shall have “the right to designate the beneficiary or beneficiaries of the insurance [within a designated class], . . . and shall . . . at all times have the right to change the beneficiary or beneficiaries.’ ” Id., at 658 (quoting
The Court in Wissner also noted that the statute provided that “[p]ayments to the named beneficiary ‘shall be exempt
It is important to recognize that the Court‘s analysis, while purporting to rely on Wissner, actually is contrary to the analysis in that case. As will be explored in greater detail below, the Court focuses on two provisions in concluding that military retired pay cannot be treated as community property: the provision permitting a serviceman to designate who shall receive any arrearages in pay after his death, and the provision permitting a retired serviceman to fund an annuity for someone other than the ex-spouse out of retired pay. The Court‘s theory is that since the serviceman can dispose of part of the retired pay without participation of the ex-spouse—either the arrearages or the premiums to fund the annuity—the retired pay cannot be treated as cоmmunity property. This, however, is precisely the analysis the Wissner court declined to adopt in concluding that the proceeds of an insurance policy, purchased with military pay, could not be treated as community property. The Wissner court simply concluded that the wife could not pursue her community property claim to the proceeds, even though purchased with community property funds. This is comparable to ruling in this case that appellee cannot obtain half of any annuity funded out of retired pay pursuant to the statute, or half of the arrearages, when the serviceman has designated someone else to receive them. The Wissner court specifically left open the question whether the whole from which the premiums were taken—the military pay—could be treated as community property. Id., at 657, n. 2. That is, however, the analytic jump the Court takes today, in ruling that retired pay cannot
The next two cases, Free v. Bland, 369 U. S. 663 (1962), and Yiatchos v. Yiatchos, 376 U. S. 306 (1964), involved the same provisions. Plaintiffs sought community property rights in United States Savings Bonds, even though duly issued Treasury Regulations provided that designated co-owners would, upon the death of the other co-owner, be “the sole and absolute owner” of the bonds. No such language is involved in this case.
The most recent case is, of course, Hisquierdo, in which the Court held thаt Congress in the Railroad Retirement Act pre-empted community property laws so that a railroad worker‘s pension could not be treated as community property. It bears noting that this case is not Hisquierdo revisited. In Hisquierdo there was a specific statutory provision which satisfied the requirement that Congress ” ‘positively requir[e] by direct enactment’ that state law be pre-empted.” 439 U. S., at 581 (quoting Wetmore v. Markoe, 196 U. S. 68, 77 (1904)). Section 14 of the Railroad Retirement Act of 1974, carrying forward the provisions of § 12 of the Act of 1937, provided:
“Notwithstanding any other law of the United States, or of any State, territory, or the District of Columbia, no annuity or supplemental annuity shall be assignable or be subject to any tax or to garnishment, attachment, or other legal process under any circumstances whatsoever, nor shall the payment thereof be anticipated.”
45 U. S. C. § 231m .
With all the emphasis placed on § 14 in Hisquierdo, one would have expected the counterpart in the military retired pay scheme to figure prominently in the Court‘s opinion today. There is, however, nothing approaching § 14 in the military retired pay scheme. The closest analogue,
“Under regulations prescribed by the Secretary of the Army or the Seсretary of the Air Force, as the case may be, a commissioned officer of the Army or the Air Force may transfer or assign his pay account, when due and payable.”
The contrast with the provision in Hisquierdo is stark. Section 14 forbids assignment;
In addition to § 14 the Hisquierdo Court also relied on the fact that the Railroad Retirement Act provided a separate spousal entitlement, “embod[ying] a community concept to an extent.” 439 U. S., at 584. Under the Railroad Retirement Act,
II
The foregoing demonstrates that today‘s decision is not simply a logical extension of prior precedent. That does not, to be sure, mean that it is necessarily wrong—there has to be a first time for everything. But examination of the analysis in the Court‘s opinion convinces me that it is both unprecedented and wrong.
In its analysis the Court contrasts the statute involved in Hisquierdo, noting that there spouses received an annuity which terminated upon divorce. Here there is no such provision. As the Court states its conclusion: “Thus, unlike the Railroad Retirement Act, the military retirement system does not embody even a limited ‘community property concept.’ ” Ante, at 224. This analysis, however, is the exact opposite
“Congress carefully targeted the benefits created by the Railroad Retirement Act. It even embodied a community concept to an extent. . . . Congress purposefully abandoned that theory, however, in allocating benefits upon absolute divorce. . . . The choice was deliberate.” 439 U. S., at 584-585.
Now we are told that pre-emption of community property law is suggested in this case because there is no community property concept at all in the statutory scheme. Under Hisquierdo, this absence would have been thought to suggest that there was no pre-emption, since the argument could not be made, as it was in Hisquierdo, that Congress had addressed the question and drawn the line. See In re Milhan, 27 Cal. 3d 765, 775-776, 613 P. 2d 812, 817 (1980), cert. pending sub nom. Milhan v. Milhan, No. 80-578. I am not certain whether the analysis was wrong in Hisquierdo or in this case, but it is clear that both cannot be correct. One is led to inquire where this moving target will next appear.
The Court also relies on “several features of the statutory scheme” as evidence that Congress intended military retired pay to be the “personal entitlement” of the serviceman. The Court first focuses on
The Court resists the recognition of any rights to retired pay in the ex-spouse because of a policy judgment that it would be “anomalous” to place the ex-spouse in a better position than a widow receiving benefits under an annuity. Ante, at 227. The Court, however, is comparing apples and oranges in two respects. The ex-spouse‘s rights are to retired pay, and cease when the serviceman dies. The widow‘s rights are to an annuity which begins when the serviceman dies. The fact that Congress “deliberately has chosen to favor the widower or widow over the ex-spouse” so far as the annuity is concerned, ante, at 228, simply has no relevance to the rights of the ex-spouse to the retired pay itself. Second, the ex-spouse has contributed to the earning of the retired pay to the same degree as the serviceman, according to state law. The widow may have done nothing at all to “earn” her annuity, as would be the case, for example, if appellant remarried and funded an annuity for his widow out of retired pay. In view of this, I see nothing “anomalous” in providing the ex-spouse with rights in retired pay. In any event, such pol
The third argument advanced by the Court is the weakest of all: the Court argues that an ex-spouse in a community property State cannot obtain half of the military retired pay, by attachment or otherwise, because she can obtain alimony and child support by attachment. This is pre-emption by negative implication—not the “positive requirement” and “direct enactment” which Hisquierdo indicated were required. And since appellee does not seek to attach anything, even the negative implication is not directly relevant.
The Court also stresses the recognition of community property rights in varying degrees in the Foreign Service and Civil Service laws. Again, this hardly meets the Hisquierdo test. Both the Foreign Service and Civil Service laws are quite different from the military retired pay laws. The former contain strong anti-attachment provisions like § 14 of the Railroad Retirement Act considered in Hisquierdo, see
III
The very most that the Court establishes, therefore, is that the provisions governing arrearages and annuities pre-empt California‘s community property law. There is no support for the leap from this narrow pre-emption to thе conclusion that the community property laws are pre-empted so far as military retired pay in general is concerned. Such a jump is wholly inconsistent with this Court‘s previous pronouncements concerning a State‘s power to determine laws concerning marriage and property in the absence of Congress’ “direct enactment” to the contrary, and I therefore dissent.